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3 Gold Miners to Buy on Dips

Stock MarketsAug 11, 2021 02:30PM ET
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© Reuters. 3 Gold Miners to Buy on Dips

Gold miners have underperformed the market so far this year. However, Taylor Dart believes it could be an opportunity to buy shares of high-quality companies like Kirkland Lake Gold (NYSE:KL), B2Gold (NYSE:BTG), and Agnico Eagle Mines (NYSE:AEM).It’s been a rough start to August thus far for the Gold Miners Index (GDX (NYSE:GDX)), with the ETF sliding 9% in the last ten trading sessions. This has pushed the ETF into deeply negative territory for the year, with many poorly operated names dragging down the index. Given gold’s (GLD (NYSE:GLD)) poor performance as an inflation hedge in a clear inflationary environment, many investors have finally begun to throw in the towel on both miners and gold. This has created an opportunity for those looking for exposure to the sector. In this update, we’ll look at three names that are top buy-the-dip candidates among the sector-wide carnage:

(Source: TC2000.com)

The favored way for investors to get exposure to gold is through the Gold Miners Index, but the issue is that investors are also exposed to the dogs of the sector and get a much lower yield. These under-performers weigh on the GDX’s performance, and with the GDX owning over 50 names, it’s bound to hold several names with major operational and financial issues. This is why I prefer investing in individual miners. However, the key is to focus on the highest-quality names with the best business and be disciplined enough to wait for the right price. With three top miners now paying dividend yields of 2% or higher and trading at double-digit earnings yields, now looks like the time to begin starting new positions in names like Kirkland Lake Gold (KL) and B2Gold (BTG) and monitor for further weakness in Agnico Eagle Mines (AEM). Let’s take a closer look at the three companies below:

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3 Gold Miners to Buy on Dips
 

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