The outlook for gold is especially bright, given the Fed’s extraordinary inflationary measures — cutting interest rates to zero, and buying corporate bonds and Treasury securities, notes Mark Skousen, editor of Forecasts & Strategies.
Two months ago, we recommended taking a defensive position by buying the SPDR Gold Shares (GLD), an exchange-traded fund that invests in gold bullion. This is not a play on gold stocks, but gold itself. Gold is a better hedge against chaos than mining stocks.
It has steadily moved higher. Gold is also an inflation hedge. With the Fed cutting interest rates to zero again, and expanding the money supply, I expect gold to outperform soon.
Meanwhile, at the start of this year, I chose B2Gold (BTG) as my top speculative idea for 2020 in MoneyShow's annual "Top Picks" report. B2Gold has already risen almost 30% since — and has much more room to grow.
This Vancouver-based mining company has just reported record gold output in its three operating mines — in Mali, the Philippines and Namibia. Its revenues are up 36% in the past year to $1.2 billion. Its profit margin is over 25%. It earned more than $285 million in the past year.
The company reports no COVID-19 cases in its three mining operations, and governments in these countries have not shut down production. Because B2Gold properties are in emerging markets, the stock price is relatively cheap in the mining sector — selling for less than 10 times expected earnings!
B2Gold also has started paying a modest dividend of 1 cent per share, starting last November. Yet it has beaten Street expectations four quarters in a row. It has $141 million in cash, which is plenty to cover its $262 million in long-term debt.
I suggest you add BTG to your portfolio today if you haven’t already done so. I would not be surprised to see this stock double in price in the next year or two years.
