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Gold miners have failed to keep up with gold's recent sharp rise, falling behind due to related challenges and rising costs.
Gold stocks appear to be inexpensive and have lagged the price of gold abnormally, UBS said in an analysis on Wednesday, adding that… It trades on a P/E ratio that is 40% below normal.
The brokerage explained that the stocks also decoupled from gold prices and were supposed to rise by 45% if they followed their normal relationship with gold prices.
Maxwell Grenakov, head of US equity derivatives research at UBS, believes investors' positioning in gold mining stocks does not fully reflect price action in the safe-haven metal recently, and may be due to catch-up.
On the day, gold spot (HAUUSD: Korean currency) was trading It rose +0.52% to $2,328.32 ounce.
So what do you buy?
The investment bank calls on investors to continue to be overweight gold stocks and names the following as its favorite gold miners globally (Price performance since the beginning of the year):
- Anglo Gold Ashanti (New York Stock Exchange: AU) +20%
- Barrick Gold (New York Stock Exchange: Gold) -7.6%
- Centamin (OTCPK:CELTF) +24%
- Endeavor Mining (OTCQX:EDVMF) -5%
- Mining Development (OTCPK:CAHPF) -6%
ETFs: (GLD), (GDX), (GDXJ), (JAU), (NUGT), (PHYS), (GLDM), (AAAU), (SCHOL), (BAR), (OUNZ), (SLV), (PSLV) ), (SIVR), (SIL), (SILJ)