This Canadian Stock Could Be the Best Market Hedge Right Now

Here’s why I think Barrick Gold (TSX:ABX) could be one of the best market hedges investors worried about uncertainty should consider.

| More on:
analyze data

Image source: Getty Images

With rising interest rates and an economic recession on the horizon, it is very common for the stock market to experience price volatility. Thus, investors should look for stocks that can act as a hedge against massive price movements. One Canadian stock which can fulfill this requirement is Barrick Gold (TSX:ABX). 

Find out the reasons why. 

Barrick has been making big moves

As per reports dated April 3, 2023, Barrick Gold has entered an agreement with the Government of Papua New Guinea, New Porgera Limited, and Barrick Niugini Limited to restart operations in the Porgera gold mine. 

It is said to have approximately 10 million ounces worth of mineral deposits, along with 3.4 million ounces of inferred resources. Additionally, after the Wangima pit becomes ready for operations, it is expected to have an average annual production capacity of 700,000 ounces. 

According to the agreement, Barrick Niugini Ltd. will get 47% of the profits, while the rest will go to the other stakeholders like the Enga Provincial Government and local landowners. The gold exploration company also plans to hire locals for its mining activities. Furthermore, it will also avail goods and services from businesses based in Porgera. 

Buyback program in full flight

Data released on February 15, 2023, states that Barrick Gold has completed the repurchase of 24.25 million shares under its share-buyback program. By doing so, it returned US$1.6 billion worth of cash via various schemes and dividends to its shareholders. This is a massive increase from the US$1.4 million distribution that took place in 2021. 

Barrick’s chief financial officer Graham Shuttleworth stated that the corporation’s dividend and share-buyback policies are a result of its powerful operating performance. 

Insiders are buying

According to a report published on March 13, 2023, several insiders have been purchasing Barrick Gold shares. One of the biggest transactions in the last 12 months was by the corporation’s president, Dennis Bristow. He bought stock worth $4.4 million at the price of $21.97 for each share. 

Moreover, during the aforementioned period, other insiders contributed to transactions worth $23 million, involving 1.09 million shares. All these insider purchases indicate the trust that these individuals have on their company when it comes to the organization’s potential growth. This also reflects their optimistic attitude about the company’s future plans. 

Bottom line

Owing to the company’s buyback program and the huge investment by the corporation’s president, Barrick Gold has strong potential for growth in the long term. Thus, I think Barrick Gold could be among the best Canadian value stocks for investors seeking a market hedge right now.

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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Investing

Hand arranging wood block stacking as step stair with arrow up.
Tech Stocks

3 Canadian Growth Stocks I’d Buy Under $30

These under $30 Canadian growth stocks are well-positioned to capitalize on mega trends such as e-commerce, the electrification of vehicles,…

Read more »

Gas pipelines
Stocks for Beginners

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

Enbridge (TSX:ENB) is a superb long-term option. Here's why you should buy Enbridge stock right now and hold it for…

Read more »

money cash dividends
Dividend Stocks

This 8.39% Dividend Stock Can Pay $100 Cash Every Month

Consider investing in this monthly dividend stock at current levels to lock in high-yielding monthly distributions to create a good…

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Tech Stocks

Why This Tech Stock Just Jumped 18%

This tech stock just saw shares surge after announcing it was being acquired, but more growth could still be in…

Read more »

Canadian flag

3 Top-Performing Canadian Stocks That Should Just Keep Winning

Given their healthy growth prospects and solid underlying businesses, the uptrend in these three top-performing Canadian stocks could continue.

Read more »

The sun sets behind a power source

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

As far as top dividend stocks are concerned, Fortis (TSX:FTS) remains a top option long-term investors should consider right now.

Read more »

growing plant shoots on stacked coins
Stocks for Beginners

1 Copper Stock to Buy as Copper Prices Shine

The price of copper continues to climb, and more copper production is on the way for this top stock up…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

Here’s the Average TFSA Balance in 2024

The Bank of Montreal (TSX:BMO) says that the average TFSA balance is $41,510, far below the maximum.

Read more »