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Canada’s mining scene offers significant opportunities, especially after the recent pullback in various stocks that had previously surged due to industry tailwinds. Commodity prices fluctuate wildly, requiring investors to manage this volatility. For those with a strong stomach, investing in well-managed and reasonably valued miners can diversify and potentially boost a portfolio.
While introducing volatility is only worthwhile if it increases the chance of lowly correlated gains, commodity plays tend to swing in both directions. This makes it opportune to be a net buyer after a significant downturn. Though timing market bottoms is difficult, long-term investors (thinking 10-20 years) can find rewards in buying during these dips. Among TSX value stocks, well-managed mining companies present a compelling opportunity for those seeking long-term growth and diversification.
Cameco (TSX:CCO)
Cameco presents a strong case for long-term growth, driven by the resurgence of nuclear power. Nuclear energy, being clean and increasingly safe due to technological advances (such as artificial intelligence), may gain more acceptance over time. Although sentiment towards nuclear power can fluctuate, current trends are positive.
Cameco, as a leading uranium producer, stands to benefit significantly from this nuclear renaissance. With a 426% surge over the last five years, the company's prospects look promising. If the nuclear trend continues into 2030, Cameco could see similar gains.
Barrick Gold (TSX:ABX)
Barrick Gold is an attractive option for those seeking to hedge against market uncertainty. While the tech sector has been booming, questions remain about the sustainability of this enthusiasm. The increasing demand for gold, particularly among millennials, supports a positive outlook for the precious metal.
With gold prices slightly off their recent peak, gold miners, including Barrick, appear to offer good value. Barrick’s stock, with a 2.43% dividend yield, provides income while waiting for gold prices to rise again after the latest pullback. Although the stock is down 11% from its 52-week highs, initiating a starter position now could be prudent.
Both Cameco and Barrick Gold offer compelling long-term investment opportunities. Cameco is poised to benefit from the growing acceptance of nuclear energy, while Barrick Gold provides a hedge against market uncertainty with its dividend yield and favorable positioning in the gold market. For investors willing to embrace the volatility and long-term nature of these investments, both companies are worth considering for their portfolios.
