We are now at the halfway point of the year. The S&P/TSX Index is still down by 8.60% despite posting three consecutive months of gains. Looking back on the first, the top stocks on the TSX Index are likely those unknown to the average investor.
In 2020, three stocks that have returned more than 200% to shareholders. This means that lucky shareholders have more than tripled their investments in only six months.
Can this trend continue in the second half? Let’s take a look.
|Trillium Therapeutics (TSX:TRIL)(NASDAQ:TRIL)||699.25%||5.88%||Health Care|
|Aura Minerals (TSX:ORA)||637.01%||171.43%||Materials|
|Northern Dynasty Minerals (TSX:NDM)||255.36%||27.56%||Materials|
The top performer
The best performing stock is Trillium Therapeutics. This dual-listed pharmaceutical company was actually on the verge of being delisted from the NASDAQ earlier this year. What a difference a few months can make.
The company’s share price started trending upward in a big way as Gildead (NASDAQ:GILD) bought out Forty Seven for $4.9 billion. Why is this important? Well, Trillium is working on a medicine similar to that of Forty Seven’s flagship lead candidate anti-CD47 monoclonal antibody. Trillium’s lead drug is TTI-621, which is also a CD47 inhibitor.
Are new investors late to the party? It appears so. Most of Trillium’s gains came earlier in the year when the acquisition went from rumour to completion. Over the past month, it appears that the company’s stock price is once again flattening.
Two mining companies with big potential
It’s been a while since the junior mining sector posted big gains. However, as gold is trending toward new highs, there is big interest in smaller mining stocks with strong potential. Northern Dynasty Minerals and Aura Minerals fit the description of what investors are looking for.
Northern Dynasty owns a 100% interest in the flagship Pebble Mine project located in Southwest Alaska. Although it is not yet in operation, it is a world-class resource and is the largest undeveloped gold and copper project in the world.
The current resource estimate includes 57 billion pounds of copper, 71 million ounces of gold, 3.4 billion pounds of molybdenum and 345 million ounces of silver. This top stock is currently working through permitting and addressing environmental concerns.
For its part, Aurora Minerals is a junior producer with four mines in operation and four mines at various stages in development. The company’s stock price is riding the strong price of gold to new highs.
In terms of notable news, the company is in the process of listing in Brazil and recently announced its intentions to pay a dividend. Starting in 2021, Aurar will pay a cash dividend equal to 20% of its annual adjusted EBITDA less sustaining capital expenditures and exploration capital expenditures.
In response to these two events, Aurora was the top stock in June with gains north of 150%.
Are these top stocks a buy today?
As the saying goes, past performance is no guarantee of future results. I believe this to be especially true of Trillium Therapeutics. The company was mired in obscurity and was facing delisting before Gilead paid big bucks to scoop up a company with a similar product. The run-up was not a direct result of fundamentals or company performance.
While Northern Dynastic has vast potential, the Pebble Mine project has been in development for years. Environmental concerns have held the mine back for years. Any permitting setback could set the stock price crashing. On the flip side, it could be a top stock for years to come if it can finally receive approval to build the mine.
Finally, Aurora is taking advantage of the strong gold price. The money raised in the IPO will help the company develop current projects. It has little debt, and the introduction of a dividend is a sign of confidence by management. So long as the price of gold remains strong, Aurora should perform well.