Assuming you want to be in the stock market at all, it’s clear that the best gold miners are an island of normality in a sea of chaos…
A long list of companies ranging from cruise ship operators to retailers to airlines to restaurants are on life support. Many others (we’re looking at you, IBM) have spent billions buying back their own stock with borrowed money and now, even if they survive, look ridiculous.
Is there anyone left out there with good year-ahead business prospects? Why yes there is: High-quality gold miners have been accumulating reserves that made sense when gold was considerably lower. Now they’re producing at a profit and have free cash flow to distribute to shareholders. Assuming the gold price stays more-or-less at current levels, these companies will be almost unique in reporting positive year-over-year comparisons in 2020.
For an example of what’s coming, check out what Kirkland Lake Gold just released:
TORONTO, March 18, 2020 (Globe Newwire) — Kirkland Lake Gold today reported on progress with share repurchases through the Company’s normal course issuer bid (“NCIB”) and declared the quarterly dividend for the first quarter of 2020.
Compare the tone and content of the above with what is and will be coming from most other companies and it’s clear that — assuming you want to be in the stock market at all — the best gold miners are an island of normality in a sea of chaos.
A quick way to gain exposure to this sector is GDX, an ETF that owns most of the big names in the field.