Top 2 Rallying Canadian Gold Stocks to Buy This Black Friday

Buying some cheap gold stocks could be a wise investment decision to make this Black Friday. Here’s why.

| More on:
gold stocks gold mining

Image source: Getty Images

Stocks have helped investors gain big this year, as the TSX Composite continues to trade close to its all-time high levels. While most high-flying Canadian stocks have seen a correction in the last couple of weeks, a handful of gold stocks have started a big rally in the fourth quarter. In this article, I’ll highlight two such rallying gold stocks that I find worth buying this Black Friday. But first, let me explain why it could be a great time to invest in Canadian gold stocks.

Why gold stocks?

In 2021 so far, most businesses have seen much sharper than expected financial recovery after facing operational challenges due to the pandemic last year. This has driven a big rally in their stocks, making many of them look overvalued. However, challenges such as rising inflation, supply chain disruptions, and labour shortages have already started triggering concerns about slowing global economic growth.

These factors could lead to a big market correction in the coming months. As the equities market starts to correct, investors may try to de-risk their portfolios by shifting their attention to safe-haven assets like gold. This increased demand for the yellow metal could give a big push to its prices in the near to medium term and drive gold miners’ shares higher.

New Gold stock

New Gold (TSX:NGD)(NYSE:NGD) is a Toronto-based intermediate mining company with a market cap of $1.3 billion. Its stock has already risen by more than 41% in the fourth quarter so far.

Apart from rising gold prices, the company’s much better-than-expected earnings growth in recent quarters is helping New Gold stock surge lately. In the third quarter, New Gold’s sales rose by only 3.5% year over year to US$180 million. Nonetheless, its adjusted earnings for the quarter jumped by nearly 50% from a year ago to US$0.03 per share, beating analysts’ estimates by a wide margin.

Despite lower sales volume, surging gold and copper prices helped the company post stronger revenue in the September quarter. Street analysts expect New Gold’s earnings-growth trend to massively improve the next year due to its rising production amid improving metals demand. Even after rallying by more than 40% in Q4, NGD stock is still trading with 33% year-to-date losses, making this Canadian gold stock look cheap to buy now.

IAMGOLD stock

IAMGOLD (TSX:IMG)(NYSE:IAG) is another small Canadian gold mining firm with a market cap of about $1.9 billion. Just like New gold, its shares have also risen by more than 40% in the ongoing quarter so far. But it’s still trading with 13% losses on a year-to-date basis.

In the latest quarter, IAMGOLD’s production at its West Africa-based Essakane mine remained strong due to rising throughput and improved recoveries. With this, the company is on course to meet the upper range of its full-year 2021 production guidance for Essakane mine.  

The gold miner’s management expects its mining activities to ramp up further in the fourth quarter. While rising transportation and security-related costs are likely to hurt its margin in the short term, its improving operational efficiencies could help IAMGOLD expand its margins in the long term.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool has no position in any of the stocks mentioned. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Metals and Mining Stocks

Gold bars
Metals and Mining Stocks

Why Alamos Gold Jumped 7% on Wednesday

Alamos (TSX:AGI) stock and Argonaut Gold (TSX:AR) surged after the companies announced a friendly acquisition for $325 million.

Read more »

Nuclear power station cooling tower
Metals and Mining Stocks

If You’d Invested $1,000 in Cameco Stock 5 Years Ago, This Is How Much You’d Have Now

Cameco (TSX:CCO) stock still looks undervalued, despite a 258% rally. Can the uranium miner deliver more capital gains to shareholders?

Read more »

Super sized rock trucks take a load of platinum rich rock into the crusher.
Stocks for Beginners

Cameco Stock and More: 3 TSX Commodity Titans to Watch in 2024

Cameco stock and these others will provide you with growth that goes beyond just a year or two, with all…

Read more »

Handwriting text writing Are You Ready For Tomorrow question. Concept meaning Preparation to the future Motivation Stand blackboard with white words behind blurry blue paper lobs woody floor.
Stocks for Beginners

3 Reasons to Buy Lundin Stock Like There’s No Tomorrow

Lundin stock (TSX:LUN) has been killing its production of copper and plans on blowing its records out of the water…

Read more »

Gold bars
Stocks for Beginners

TSX Materials in March 2024: The Best Stock to Buy Right Now

Materials have been quite volatile, though the price of gold has surged to all-time highs. That makes this stock a…

Read more »

Gold bars
Metals and Mining Stocks

Will Gold Stocks Rally in 2024?

Down almost 30% from all-time highs, Franco-Nevada is a gold mining stock trading at a discount to consensus price target…

Read more »

A miner down a mine shaft
Stocks for Beginners

Canadian Mining Stocks: Buy, Sell or Hold?

Canadian mining stocks have seemed like such a strong investment, but with shares down significantly this year, what should we…

Read more »

Gold king in chess game face with the another silver team on black background (Concept for company strategy, business victory or decision)
Stocks for Beginners

Great News for Gold Stock Investors!

Gold has hit an all-time high! Which is good news for some gold stocks, and really good news for others.

Read more »