With rising economic concerns, investors may want to consider gold stocks, particularly as it seems the smart money is loading up on the yellow metal. Most notably, in my opinion, unusual stock options volume indicators have been picking up bullishly aberrant trades for gold-related call options. In other words, the big players are placing massive bets on this otherwise speculative industry.
Another factor to consider is that all investors have a reason to be concerned. With some of the U.S. regional banking fallout sending jitters abroad, investors seek wealth protection rather than hitting home runs. Perhaps the best part about the below gold stocks to buy is they could really soar while providing an alternative platform to park your portfolio.
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A gold-focused royalty and streaming company, Franco-Nevada (NYSE:FNV) offers an enticing opportunity among gold stocks to buy. Essentially, Franco-Nevada provides capital to mining enterprises. In exchange, the company receives a share of the metals production and/or revenues generated. Since the start of the year, FNV gained almost 12% of its equity value.
Financially, the gold enterprise enjoys several compelling attributes. Perhaps most importantly at this juncture, Franco-Nevada has zero debt, affording it incredible flexibility. Also, its Altman Z-Score pings at 85.19, indicating extremely low bankruptcy risk over the next two years.
As well, it benefits from a solid three-year revenue growth rate of 16.2%. And its net margin comes in at 53.21%, blowing past nearly 95% of its peers. Finally, Wall Street analysts peg FNV as a consensus moderate buy. However, their average price target is only $155.75, implying just over 1% upside potential.
Osisko Gold Royalties (OR)
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Founded in 2014, Osisko Gold Royalties (NYSE:OR) may not be one of the most popular gold stocks to buy. However, Osisko deserves attention because it’s been lighting up the charts. Since the start of the new year, OR skyrocketed by almost 36%. In the past 365 days, it’s up nearly 21%, possibly reflecting a turnaround for the precious metals.
Financially, though, it’s a mish-mash of different financial readings, some positive, some negative. On the more optimistic side, Osisko features a solid balance sheet, undergirded by an Altman Z-Score of 9.58. Regarding profitability, its operating margin is 30%, above 88.43% of companies in the metals and mining industry.
That said, its net margin on a trailing-year basis sits in negative territory. Also, its three-year revenue growth rate likewise sits below zero. Despite the flaws, Wall Street analysts love the opportunity, pegging OR a consensus strong buy. Their average price target is $16.99, implying a little over 2% upside potential.
Pan American Silver (PAAS)
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Headquartered in Vancouver, British Columbia, Canadian mining firm Pan American Silver (NASDAQ:PAAS) features mines and other projects in Mexico, Peru, Bolivia, and Argentina. Since the start of the new year, PAAS gained 13% of its equity value. Unfortunately, in the past 365 days, it lost 32%. Still, PAAS could be an intriguing name among gold stocks to buy.
Mainly, it’s because analysts really dig the opportunity in Pan American. Still, investors should be prepared to be patient. Frankly, the company’s balance sheet leaves much to be desired, though it does feature a decent Altman Z-Score of 3.88.
Operationally, its three-year revenue growth rate of 3% ranks worse than 60.4% of the competition. Also, its profit margins slipped into negative territory on a trailing-year basis. While that doesn’t sound enticing, analysts peg PAAS as a unanimous strong buy. Moreover, their average price target stands at $22.13, implying 14% upside potential.
Orla Mining (ORLA)
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Also based in Vancouver, Orla Mining (NYSEAMERICAN:ORLA) might not be the most recognizable name among gold stocks to buy. However, this status might change because of its steady performance. First, since the Jan. opener, ORLA gained over 11% of market value. Now, in the trailing year, it’s down 7%. However, since July last year, shares printed a series of higher lows.
Like Pan American Silver, Orla Mining will require patience from prospective investors, though not nearly as much. For example, the company’s Altman Z-Score pings at 4.52, indicating low bankruptcy risk. Further, its three-year book growth rate comes in at 26%, ranked better than 80.48% of the field.
Significantly, Orla offers a highly profitable enterprise. Its net margin came out to 23.77%, above 87.88% of other gold stocks to buy. Lastly, covering analysts peg ORLA as a unanimous strong buy. Their average price target stands at $5.60, implying nearly 22% upside potential.
B2Gold (BTG)
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An increasingly popular name among gold stocks to buy based on unusual stock options volume data, B2Gold (NYSEAMERICAN:BTG) owns and operates gold mines in Mali, Namibia, and the Philippines. Since the beginning of the year, BTG gained over 13% of its equity value. In the trailing year, however, shares tumbled by more than 10%. Still, it’s worth keeping tabs on BTG because the smart money has been bidding up shares.
Part of the enthusiasm centers on its financials. Notably, on the balance sheet, B2Gold’s debt-to-equity ratio sits at 0.02 times, favorably below the sector median of 0.15 times. Also, its Altman Z-Score pings at 6.12, well into the safe zone of fiscal stability.
Operationally, B2Gold commands a three-year revenue growth rate of 13.9%, which is decent. As well, its net margin comes in at 14.63%, outpacing nearly 79% of the competition. In closing, analysts peg BTG as a consensus strong buy. Their average price target stands at $5.66, implying over 35% upside potential.
DRDGOLD (DRD)
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Based in South Africa, DRDGOLD (NYSE:DRD) is an intriguing gold producer. In addition, the company specializes in the recovery of metal from the retreatment of surface tailings. As with a few other gold stocks to buy, DRD soared in the year so far, moving up 31%. In the trailing year, DRD gained 11% of equity value.
Moving forward, DRDGold should appeal to investors seeking financially resilient mining enterprises. On the balance sheet, the company benefits from a subterranean debt-to-equity ratio. Also, its Altman Z-Score comes out to 7.39, reflecting high stability and low bankruptcy risk.
Operationally, DRDGold delivers the goods with a three-year revenue growth rate of 14.4%, outpacing more than two-thirds of the field. Also, its net margin is 22%, reflecting a highly profitable enterprise.
Turning to Wall Street, H.C. Wainwright analyst Heiko Ihle pegs DRD as a buy. Further, the expert’s price target stands at $15, implying 48% upside potential.
TRX Gold (TRX)
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A penny stock in the literal sense, TRX Gold (NYSEAMERICAN:TRX) presents a wildly risky proposition. So, why include it on this list of gold stocks to buy? All of the enterprises here feature bullish analyst support with average price targets that imply positive momentum (no matter how small). With TRX Gold’s case, you might see incredible gains. And yes, I’m well aware that shares already moved up 50% this year.
And unlike other highly speculative cheap entities, TRX Gold enjoys decent financials. For instance, on the balance sheet, the company’s debt-to-EBITDA ratio sits at 0.02 times, below the sector median of 1.53. Also, its Altman Z-Score is 3.21, indicating a modestly low risk of imminent bankruptcy.
Notably, TRX features a three-year book growth rate of 24.6%, ranked better than 79.07% of the competition. Further, its operating margin is 25.3%, beating out 84.77% of rivals.
Finally, H.C. Wainwright analyst Heiko Ihle also pegs TRX a buy. The expert’s price target is $1.10, implying 110% upside potential.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
