Gold Mid-Tiers' Q4'19 Fundamentals

Summary

• The mid-tier gold miners reported awesome results in Q4, directly driven by its much-higher prevailing gold prices.  And their fundamentals should continue improving in Q1 and beyond.
• The mid-tiers also had far-better output growth than the majors, helping fuel soaring revenues, operating cash flows, and earnings. Implied earnings growth continues to look massive with gold powering higher.
• After this COVID-19 stock panic crashed this sector, these stocks are trading at some of their steepest discounts to current fundamentals ever! That gives them epic potential to soar higher.

The mid-tier gold miners’ stocks have been annihilated with COVID-19 fears infecting traders’ sentiment. They crashed with gold getting hammered on extreme gold-futures selling! With blood in the streets, the buy-low opportunities are phenomenal. The fundamentally-superior mid-tier gold miners have epic upside potential during gold’s next upleg. This key sector just reported outstanding Q4’19 results on higher gold.

The sheer carnage in gold-stock-land has been jaw-dropping! In late February, the gold-stock sector per its leading benchmark GDX VanEck Vectors Gold Miners ETF (GDX) edged up to a 3.5-year high slightly above early September’s. That was fueled by gold’s $1600 breakout surge on COVID-19 fears. Yet as I warned in an essay the trading day before GDX’s peak, gold’s surge was peculiar and precarious lacking normal drivers.

With popular gold-stock greed excessive, our subscription newsletters took the contrarian side shorting gold and its miners’ stocks via put options and leveraged ETFs. For prudently heeding the data rather than blindly following the herd, I suffered plenty of ridicule. But those trades were soon vindicated with big realized gains. Over the subsequent 14 trading days, GDX plummeted an unthinkably-brutal 38.8%!

That extreme capitulation-grade selling intensified this Monday morning, with GDX crashing yet another 14.8% on open. But from there it rocketed 39.0% intraday to a +18.4% close! So the very next day in our weekly newsletter, I launched our long-awaited new gold-stock-buying campaign to ride gold’s next major upleg. This sector looks wildly-bullish not just due to its technical thrashing, but its amazing fundamentals.

The sweet spot for gold-stock upside potential has always been the mid-tier gold miners. Unlike the large majors, mid-tiers’ lower gold-production levels leave room for big output growth. Investors prize that over everything else, since it leads to far-higher earnings and stock prices. Mid-tiers also have way-lower market capitalizations than majors, making it far easier

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

I'm amassing new positions in individual gold stocks and silver stocks, which are being recommended to our subscription-newsletter subscribers as they are added.