2023 has been a great year for investors thus far, with several asset classes enjoying double-digit year-to-date percentage gains, including the Nasdaq 100 Index (QQQ).
While it may be lagging short-term after a strong November and December, the strongest performance has come from the Gold Miners Index (GDX), which outperformed the Nasdaq 100 by more than 3500 basis points in 2022, and is up 46% off its Q3 2022 lows.
Following this strong rally in the GDX and a surge in optimism among investors, some consolidation or a deeper pullback would not be surprising.
However, it’s worth building a watchlist of undervalued now to prepare for sharp pullbacks, assuming these stocks retreat into a low-risk buy zone.
In this update, we’ll look at two gold names still trading at deep discounts to fair value and highlight their low-risk buy zones:
Argonaut Gold (ARNGF)
Argonaut Gold (ARNGF) is a gold producer with a market cap of $430 million and was a name I highlighted in November as one to keep a very close eye on, and I stated the following:
To summarize, this pullback in the stock has provided a fire sale, and I don’t recall the last time I saw sentiment this bad for a producer in years.
Since that update, the stock has soared by more than 60% and is one of the top-performing gold producers by a wide margin.
This is partially attributed to the strong recovery in the gold price that has placed a relentless bid on gold miners but also due to several positive developments.
The major one worth discussing is the appointment of a new Chief Executive Officer, Richard Young, who is well known for transforming Teranga Gold from a junior producer into a $2.0 billion miner before its eventual takeover in late 2020. Continue reading "2 Gold Stocks To Add To Your Watchlist"