In April 2022, we wrote the following:
In February 2021, inflation took a decided turn higher. The price of gold and the share prices of many gold miners followed higher. As we show below, the price of gold has been in a long-term cup and handle technical pattern. A break above the highs of late 2020 (the cup’s rim) could signal a significant rally ahead that should benefit gold miners.
Over a year later and the pattern is still in play as the handle has become elongated. The blue lines in the graph below update the progression of the pattern. From a technical perspective, the cup and handle pattern is still valid.
The graph below provides context for what might happen to gold prices and gold miner stocks if the price of gold breaks above the dotted blue line above.
This week’s scan repeats the scan from last April. We are looking for five gold miners with reasonable valuations and good price performance. The prior scan also looked for low debt levels and P/E ratios below 25.
The only stock that met that original criterion was Galiano Gold (GAU). This scan drops the debt and valuation criteria and arrives at four gold miners. The table below compares the four stocks to the widely held gold miner ETF, GDX.
Screening Criteria
We used the following screening criteria:
- Gold Mining Industry
- YTD Price performance +10% or >
- Price above 50 and 200 moving averages
Company Summaries
Galiano Gold (GAU)
Equinox Gold (EQX)
Kinross Gold (KGC)
Orla Mining LTD. (ORLA)
Five for Friday
Five for Friday uses stock screens to produce five stocks that we expect will outperform if a particular investment theme plays out in the future. Investment themes may be relevant to the current or expected market, industry and/or economic trends. Investment themes may not always represent our current forecast.
Disclosure
This report is not a recommendation to buy or sell the named securities. We intend to elicit ideas about stocks meeting specific criteria and investment themes. Please read our disclosures carefully and do your own research before investing.
Michael Lebowitz, CFA is an Investment Analyst and Portfolio Manager for RIA Advisors. specializing in macroeconomic research, valuations, asset allocation, and risk management. RIA Contributing Editor and Research Director. CFA is an Investment Analyst and Portfolio Manager; Co-founder of 720 Global Research.
Follow Michael on Twitter or go to 720global.com for more research and analysis.
Customer Relationship Summary (Form CRS)