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22. December 2020 | 07:50 CET

Barrick Gold, Blackrock Gold, AngloGold Ashanti: Gold shares for every type of investor

  • Precious Metals
Photo credits: pixabay.com

Whenever central banks and governments open the money floodgates, it's a positive signal for the gold price. After the initial reactions to the pandemic in March and April, the prices of gold companies went steeply upwards. Shares of many smaller companies in particular multiplied between April and August. Since then, the market has entered a consolidation phase. This phase could be an opportunity for investors - after all, the prices of gold shares, in particular, have fallen back, in some cases, significantly. At the same time, the pandemic is spreading, and governments and central banks are in a certain path dependency: to deny support to the economy now on the home stretch seems unlikely and also counterproductive given the aid already provided. Gold and companies involved in gold production should, therefore continue to have good prospects.

time to read: 3 minutes by Nico Popp


 

Author

Nico Popp

At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

About the author


Barrick Gold: Where to put the free cash flow?

One Company that first comes to mind for many retail investors with a focus on gold is Barrick Gold. The world's largest gold producer is benefiting directly from the rise in gold prices in recent months. The Company recently increased its sales and is growing in all areas and regions. This growth would be an excellent sign for investors if it were not for the declining profit, which fell by about one third after nine months of the fiscal year. Nevertheless, the positive news outweighs the negative at Barrick: Cash flow continues to rise, and management recently took this as an opportunity to raise the dividend. Given the increased share price, however, the dividend yield is relatively meager at around 1%.

Barrick Gold has announced that it will continue to invest its free cash in promising gold projects in the future. While due diligence on gold projects has come to a virtual standstill in light of travel restrictions, Barrick intends to meet the challenges and is looking to the future. For Barrick, this includes a sustainability strategy, which is also becoming increasingly crucial for commodity companies. Barrick Gold's stock returned just under 20% last year. While that's not outstanding, the stock remains a concrete way to profit from the price of gold.

Blackrock Gold and the end of price lethargy

The Blackrock Gold share shows that gold shares can be much more spectacular. What the shares of Barrick Gold did in one year, the little Canadian explorer put on the floor in the past week alone. The Company recently published positive drill results. In the process, the Company expanded its Tonopah West property by 480 meters to the east. At the same time, the gold and silver grades were convincing and suggest possible economic mining. The project is located in Nevada in the middle of a historic mining district for precious metals.

Since August, when the share scratched the EUR 1.0 mark in Germany, it has fallen back significantly and reached a low of EUR 0.40. Only the latest results pushed the share back above the EUR 0.50 mark. Blackrock is currently operating three drilling rigs and plans to drill a total of 30,000 meters to be able to determine the prospects of its project even more clearly. The goal is to sell the property profitably to a major producer. There is undoubtedly still a long way to go until then, but the Company is confident given the quality of its property and its location in the US state of Nevada. Especially for speculative investors, the stock could be worth considering.

AngloGold Ashanti and the cost problem

The AngloGold Ashanti share shows that trees do not grow to the sky, even for gold companies: over one year, investors were only able to achieve a return of just under 7%. The problem of South Africa is the costs. AngloGold Ashanti has recently divested itself of some projects and is fine-tuning its profitability. To this end, promising mines are to be further expanded in addition to the sale of poor projects. The rising gold price came at the right time for the South African Company: On the one hand, it took the pressure off costs and made it easier to sell projects, and on the other hand, it made it easier to invest in the future.

Tailor-made solutions for every type of investor

Although the share has lost more than a third since August, the stock could quickly get back on track. In addition to positive water level reports from the restructuring, a rising gold price would also help. Among the major gold producers, AngloGold Ashanti is certainly one of the more speculative stocks. Whether it is the conservative Barrick Gold, the restructuring case of AngloGold Ashanti or the up-and-coming small cap Blackrock Gold, investors can access gold stocks depending on their return requirements and risk profile, and thus create tailor-made portfolio solutions. The outlook for the gold market is positive.


Author

Nico Popp

At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

About the author



Conflict of interest & risk note

In accordance with §34b WpHG we would like to point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH may hold long or short positions in the aforementioned companies and that there may therefore be a conflict of interest. Apaton Finance GmbH may have a paid contractual relationship with the company, which is reported on in the context of the Apaton Finance GmbH Internet offer as well as in the social media, on partner sites or in e-mail messages. Further details can be found in our Conflict of Interest & Risk Disclosure.


Related comments:

19. November 2020 | 09:40 CET | by André Will-Laudien

Triumph Gold, Impala Platinum, First Majestic Silver: precious metals for Biden's debt policy!

  • Precious Metals

Economists refer to "asset inflation" as the increase in the price of all assets. What is meant by this is the general increase in the price of all asset investment vehicles such as bonds, shares, precious metals or real estate. We make no secret of it: ALL of the objects as mentioned above are paid with newly created money, the liquidity in the system ensures quasi permanently that assets are practically subject to a permanent and continuous increase in price. Shares, for example, have risen by an average of 9% per year since 2009. Bonds measured by the Bund future are quoted at a 100-year high with negative yields and a rich real negative interest rate, yes, and real estate in good locations has more than tripled in value over the last 20 years. In Munich, for example, the average weighted price per square meter for new residential buildings is around EUR 8,500 (range EUR 5,000-16,000) - in 2000, this was still EUR 2,850. Now we come to the precious metals using gold as an example: the yellow metal cost around USD 400 per ounce in 2005 and is now worth USD 1,875, a plus of 370% in 15 years. Let's take a closer look at the world of precious metals.

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09. October 2020 | 11:58 CET | by Nico Popp

Barrick Gold, Newmont, Blackrock Gold: Opportunities in the sloping market

  • Precious Metals

First the central banks and now possibly a generous new US President Joe Biden - when it comes to reasons for rising prices, market commentators always find an explanation. But one thing is sure: most support measures or capital injections are bought with capital that has either been borrowed or created by central banks. In any case, such measures should also boost the price of gold. Barrick Gold's stock looks back on a successful year and has gained a significant 53% - but how much potential does the gold blue-chip still have after the rise?

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