Gold is a central theme of our portfolio and there are plenty of quality precious metals stocks in our portfolio that investors can consider, explains Nick Hodge, editor of Wall Street's Underground Profits.
Franco-Nevada (FNV) is one of them. I just recommended it in September and it is buy-rated under US$70.00. It currently trades at US$65.50.
Franco just reported Q3 income of US$52.1 million (US$0.28/share). Net income for the first nine months of the year was $170.3 million, up from $151.2 million in the same period last year. It has declared a quarterly dividend of US$0.24 per share. The dividend will be paid on December 20, 2018 to shareholders of record on December 6, 2018.
Franco is also rapidly increasing revenue from oil and gas operations, which have increased 109% year over year. It increased guidance for annual revenue from this sector from $65-75 million to $75-85 million. So you can get some oil royalty exposure as well as gold and silver.
Atlantic Gold (TSX-V: AGB)(OTC: SPVEF) is also buy-rated. It trades at C$1.65 and is a buy under C$1.80. It reported Q3 production numbers (not earnings) earlier this month, and continues to execute above expectations.
It produced 27,570 ounces of gold in Q3, which was above guidance, and has produced 68,022 ounces year-to-date. The company expects to finish the year at the upper end of production guidance of 82,000 to 90,000 ounces. Financial results will be out next week, so keep an eye out for those. Atlantic Gold is a buyout candidate.
Teranga Gold (TSX-V: TGZ)(OTC: TGCDF) is also worth a look. It produced a record 56,376 ounces of gold in the third quarter and has produced 185,788 ounces year-to-date. It will produce between 235,000 and 240,000 ounces of gold for the year, well above original guidance of 210,000 to 225,000 ounces.
It is producing nearly twice the gold as Atlantic Gold but is only being valued 30% more. I think it is undervalued. Shares hit C$5.63 earlier this year but have pulled back to C$3.60. It’s a buy under C$3.75.
It has a second mine under construction that is expected to increase annualized consolidated production by 50% to about 350,000 ounces. And it has a third project, Golden Hill, that has the potential to take the company to mid-tier producer status.
