2 TSX Gold and Silver Stocks That Could Take Off

First Majectic Silver (TSX:FR)(NYSE:AG) is just one of many silver and gold mining stocks that could take off as precious metals soar.

| More on:
silver metal

Image source: Getty Images

With growing tensions in Ukraine and Russia, it’s not a mystery as to why silver and gold stocks have been picking up traction of late. Indeed, there’s no way of telling how the ongoing crisis in Ukraine will end. With Fed rate hikes, inflation, surging oil prices, COVID, and a flattening yield curve to also worry about, there’s never been a better time to punch your ticket to precious metals stocks. Silver stocks may provide portfolios with a bigger jolt, as gold looks to exhaust its rally just north of US$2,000 per ounce.

While a large number of concerns atop investors’ lists could dissipate overnight, I do think that many gold and silver stocks seem undervalued, given the recent run-up in their prices. And if you’re like many new investors who’ve bought into Bitcoin but have neglected precious metals, now seems like a decent time to buy gold and silver stocks (or bullion) on the way up.

While it would have been better to buy before geopolitical tensions took hold of the broader stock markets, silver and gold stocks, I believe, are okay to buy on strength. Indeed, buying them on weakness may not be the way to go, given commodities can stay stuck in a rut for many years at a time. Further, many top-performing gold and silver stocks seem undervalued relative to where gold and silver prices have run of late.

Without further ado, please consider the following miners that I think are a great way to further diversify your portfolio or help you offset the painful losses that could accompany a worsening of this broader stock market sell-off.

Agnico Eagle Mines

Agnico Eagle Mines (TSX:AEM)(NYSE:AEM) is a top-tier Canadian miner that may have walked away with one of the best deals in the gold sector, with the acquisition of Kirkland Lake Gold in a deal I thought was closer to a steal. Indeed, looking back, the move made a ton of sense. Kirkland was rich with gold assets, and the price of gold was in a bit of a slump. Now that gold is surging above US$2,000, the next stop could be US$2,200 as macro uncertainties grow to unprecedented levels. In any case, I’m no fan of projecting gold prices. Commodity prices are dictated by a profoundly large number of exogenous variables. Nobody can predict them accurately. That said, I do think it makes a ton of sense to own a well-run miner like Agnico as a portfolio diversifier.

Sure, Bitcoin is the new gold through the eyes of some investors. But precious metals exposure should not be replaced by crypto. Why? I view them as entirely different asset classes. Though they share some similarities, gold and silver are far less volatile, with a proven track record of holding most of its value through tough inflationary times.

First Majestic Silver

First Majestic Silver (TSX:FR)(NYSE:AG) is arguably one of my favourite silver miners. I pounded the table on the company back when silver was fluctuating in the low US$20 per ounce range. Now, silver is red-hot, and FR stock has been leading the charge, with another 5.4% in gains added on Tuesday’s choppy session of trade.

At 6.6 times sales, FR stock isn’t the cheapest precious metals miner out there, but given the recent run in silver and gold, I’d argue that the premium is well worthwhile, especially if you have zero in the way of silver exposure. I think it’s time to get in before the stock makes a run to the Street-high $22.65 target maintained by Heiko Ihle of H.C. Wainwright.

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.

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Metals and Mining Stocks

A miner down a mine shaft
Metals and Mining Stocks

Should Investors Buy the Correction in Lundin Mining Stock?

Lundin (TSX:LUN) stock has fallen by 10% in the last few weeks, but so has the price of copper. Coincidence?…

Read more »

Metals and Mining Stocks

Best Stocks to Buy in May 2024: TSX Materials Sector

A TSX materials sector ETF could help investors gain cheap diversified exposure to the hot sector's stocks – so will…

Read more »

Hands protect a sprout in fertile soil.
Metals and Mining Stocks

What’s Going on With Nutrien Stock?

Nutrien (TSX:NTR) stock has seen shares rise higher as the company sees more demand for fertilizer starting up once more.

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Metals and Mining Stocks

2 TSX Commodity Stocks With Massive Upside Thanks to Gold Bugs and the Battery Boom

Investing in mining stocks such as Barrick Gold and Lithium Americas can help you benefit from rising commodity prices.

Read more »

Safety helmets and gloves hang from a rack on a mining site.
Metals and Mining Stocks

Why Shares in This Leading Mining Stock Soared 21% in May

This gold stock has risen higher on the back of gold prices, sure, but there's even more driving shares this…

Read more »

stock market
Metals and Mining Stocks

Is Barrick Gold Stock a Buy in 2024?

Barrick Gold (TSX:ABX) is often regarded as one of the best precious metal stocks to own. But should you buy…

Read more »

sale discount best price
Metals and Mining Stocks

3 Cheap TSX Stocks to Buy Right Now

TSX stocks such as Barrick Gold and two others are trading at a cheap multiple and at a discount to…

Read more »

A miner down a mine shaft
Metals and Mining Stocks

3 Copper Stocks to Buy as the Commodity Continues to Soar

Are you looking to get in on the growth of copper stocks? These are the biggest heavy hitters out there…

Read more »