The Zacks Analyst Blog Highlights: Kirkland Lake Gold, Osisko Gold Royalties and Sibanye Gold

For Immediate Release

Chicago, IL – April 8, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Kirkland Lake Gold Ltd. KL, Osisko Gold Royalties Ltd OR and Sibanye Gold Ltd SBGL.

Here are highlights from Friday’s Analyst Blog:

Gold Drops but Doesn't Lose Sheen: 3 Stocks to Bet On

Gold prices dropped to a 10-week low, hitting $1291.65 on Apr 4, owing to rise in dollar. Weekly jobless claims declining to 50-year low, strong manufacturing data and optimism regarding US-China trade negotiations fueled the greenback’s rise.

Per the Labor department, jobless claims in the week ended Mar 30, declined by 10,000 to 202,000 – the lowest level since 1969. This signals that the U.S. labor market continues to build momentum and a reassuring sign for the economy. All eyes are now on the to-be-released employment report for March.

Per the Institute for Supply Management, March PMI stood at 55.3%, indicating growth for the 31st consecutive month for the manufacturing sector. These developments along with optimism regarding a possible trade deal between the United States and China, aided dollar and stocks. The Dow Jones Industrial Average rose 0.64% on Apr 4 while S&P 500 rallied 0.21%. The U.S Dollar Index, which measures the greenback against six trading rivals, closed at 97.30, up 0.2%. Gold usually moves in opposite direction with the dollar. Further, when equities post gains, investors stop buying safe-haven assets such as gold.

Notwithstanding this dip, gold prices have notched a gain 0.8% so far this year and even crossed the psychological level of $1,300 an ounce. Let’s take a look at the factors that are likely to support gold prices this year.

A Dovish Fed: The Fed’s announcement that short-term interest rates will remain unchanged and no hikes expected in 2019, will be conducive for gold prices.

Central Bank's Increasing Appetite for Gold: There has been a noted increase in demand for gold as a reserve asset in 2018, rising 74% compared with 2017. Central banks added 651.5 tons to gold reserves in 2018, the second highest yearly total on record.

India & China Hold Promise:In the last decade, combined demand for gold from India and China has soared 71%. The expanding middle class combined with broader economic growth, will have a significant impact on gold demand. The second half of the year is seasonally stronger in India due to wedding and festive seasons.

Safe-haven Demand:Persistent uncertainty surrounding Brexit timing and its implications will continue to aid gold prices. Gold has long been considered as a safe haven investment in times of financial or political uncertainty.

Industry Positioning, Valuation

Year to date, the Gold Mining industry advanced 6.7% while the S&P 500’s rallied 14.5%. The industry has a trailing 12-month EV/EBITDA multiple of 7.7, lower than the S&P 500’s 11.0.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright prospects in the near term. The Zacks Mining- Gold Industry, which is a 33-stock group within the broader Zacks Basic Materials Sector, currently carries a Zacks Industry Rank #95, which places it at the top 37% of 256 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.

Our Picks

Kirkland Lake Gold Ltd.: This Toronto, Canada-based company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for earnings for 2019 has gone up 44% over the past 90 days and projects year-over-year growth of 47%. The company has delivered average positive earnings surprise of 6.45% over the trailing four quarters. Its shares have soared 109% in the past year.

Osisko Gold Royalties Ltd: This Montreal, Canada company carries a Zacks Rank #2 (Buy). The company has delivered average positive earnings surprise of 116.67% over the trailing four quarters. Its shares have gone up 18.4% over the last year.

Sibanye Gold Ltd: This Weltevreden Park, South Africa-based company carries a Zacks Rank #2. The Zacks Consensus Estimate for earnings for 2019 is 7 cents per share against a loss per share of 10 cents in 2018. Sibanye Gold has gained 18.6% over the past year.

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

See Latest Stocks Today >>

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Sibanye Gold Limited (SBGL) : Free Stock Analysis Report
 
Osisko Gold Royalties Ltd (OR) : Free Stock Analysis Report
 
Kirkland Lake Gold Ltd. (KL) : Free Stock Analysis Report
 
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