HomeMost PopularGolden Opportunity: Newmont's Economic Fortitude and Stock Potential

Golden Opportunity: Newmont’s Economic Fortitude and Stock Potential

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A lump of gold on a stone floor

Newmont (NYSE:NEM) has solidified its position as the premier blue-chip choice in the gold mining domain. After a merger that made it the largest gold miner on the planet in terms of sales and equity market capitalization, Newmontโ€™s economic strength is unmatched, making it a must-have investment in every gold enthusiastโ€™s portfolio.

Newmontโ€™s enhanced stature as the largest gold miner is backed by massive gold reserves and resources, substantial silver and copper production, as well as an exceptional diversification of Tier 1 mines in stable jurisdictions. With the demand for silver and copper poised to surge due to green energy supply growth, Newmontโ€™s prominence in these sectors further adds to its appeal.

The apparent undervaluation of Newmont only serves to underscore its attractiveness as an investment. The company has the potential to deliver substantial dividend yield amidst a backdrop of rising metal values, offering investors a unique income opportunity.

Bargain Valuation

While Newmont previously commanded a premium valuation in the industry, the companyโ€™s combined entity is currently trading at a relatively normal ratio compared to major gold miners. As earnings continue to move in the right direction, the valuation on income generation becomes increasingly compelling.

Furthermore, Newmontโ€™s stripped-down forward P/E of 17.2x is significantly inexpensive, especially given the companyโ€™s industry-leading asset quality and diversification, making it a lucrative investment prospect.

Unparalleled Investment Logic

There are four main reasons to consider owning a gold producer such as Newmont: as a portfolio hedge, attractive valuations, bullish sentiment on precious metals, and potential for resource finds and discoveries. Newmont effectively ticks all these boxes, cementing its status as a top-tier investment choice for immediate and long-term ownership.

Final Thoughts

Against the backdrop of a more favorable performance of gold and silver and the completion of the merger deal, Newmontโ€™s upside potential has significantly improved. With a projected target price set to triple in the next 2-3 years, the opportunity for substantial gains is simply too enticing to ignore.

However, potential risks associated with macroeconomic changes and stagnation in precious metals prices should be considered, albeit unlikely to significantly dampen Newmontโ€™s prospects. Wall Streetโ€™s focus on Newmontโ€™s undervaluation, rising precious metal quotes, and the potential for commodity inflation further supports its appeal as a prudent investment.

With a multitude of compelling reasons to own Newmont and the potential for significant future returns, the case for investing in the company grows stronger by the day.

Thanks for reading. Please consider this article a first step in your due diligence process. Consulting with a registered and experienced investment advisor is recommended before making any trade.

Editorโ€™s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

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