Latest news with #Hochschild
Daily Mail
3 days ago
- Business
- Daily Mail
Why gold mining shares are too cheap, according to JP Morgan analysts
After a strong run for precious metals, gold mining shares still look undervalued. That's the view from JP Morgan's latest note on listed producers, which argues there's room for substantial upside, especially if its bullish forecast for the precious metal proves right. Its commodities team is pencilling in a price of $4,100 an ounce for 2026. That's well above current spot levels of $3,320 and would mark a new all-time high. Based on that estimate, JP Morgan sees around 40–50 per cent upside to average analyst expectations for earnings before interest, tax, depreciation and amortisation across the sector. While the American bank focused on the larger producers, citing names such as Fresnillo and Hochschild, there's plenty of value lower down the evolutionary chain. Stocks on this layer of the pyramid are increasingly disconnected from the rising gold price, rather than moving in step. Of course, being small and mid-cap companies, it often takes time for the market to focus on inherent value, even when backed by gold. These smaller players are also more prone to operational mis-steps that larger organisations can absorb. Below is a far-from-scientific roll call of gold stocks that have thus far flown under the radar. Probably the pick of the bunch is Pan African Resources, which, with a £940 million market capitalisation, has broken free from the small-cap bracket. While its share price is up around 30 per cent year to date, it still lags the performance of Endeavour (+51 per cent) and Fresnillo (+80 per cent). Dropping down a division, Caledonia Mining stands out. Its performance has been stronger than Premier African and it comes with a very decent dividend. As valuations shrink, the link between the gold price and share price weakens. A case in point is Ariana Resources, which has modest production from its Turkish operations but ambitious growth plans in Zimbabwe. Panmure Liberum analysts, fresh from a site visit to Ariana's Dokwe project, described it as a potential multi-million-ounce asset with strong development prospects. That optimism is in stark contrast to Ariana's stock market performance, down more than 40 per cent year to date. It suggests value and opportunity may be buried in AIM's twilight zone. Ariana is preparing to list in Australia, a savvy move in a market where investors, both private and institutional, know how to value smaller gold companies. Appetite for diggers and prospectors is strong, supported by self-directed flows from Australia's generous superannuation schemes. So, watch this space. Wider market moves Turning to the wider market, the AIM All-Share continued to outperform its benchmark, rising 1.3 per cent to 746.39 and outpacing the FTSE 100, which nudged just 0.4 per cent higher. This reflects growing confidence, underlined by a slew of successful fundraisings that made May a bumper month for companies replenishing their coffers. The week's standout performer was Blue Star Capital, which jumped 150 per cent after news of its investment in cross-border crypto payments platform SatoshiPay. Avacta rose 43 per cent, a performance that would have topped the leaderboard most weeks. The appointment of two heavyweight independent directors helped ease investor concerns over a delay to the company's results. One of the new recruits, Richard Hughes, brings deep capital markets experience, possibly signalling a strategic shift for the precision medicines group. ATOME climbed 35 per cent following the launch of a new renewable energy division, initially focused on Latin America. And the laggards… At the other end of the table, Totally fell 84 per cent as investors digested the healthcare provider's semingly insurmountable funding position. Watkin Jones dropped 21 per cent after the developer of student housing and build-to-rent properties posted a loss and painted a gloomy picture of current trading. Finally, the small-cap market, especially where trading is thin or controlled by market makers, tends to react sharply to news, with professional price-setters often moving to protect positions rather than reflect true value. A case in point is hVIVO. Shares slumped 45 per cent on Friday following the loss of one contract and the postponement of another. Seasoned small-cap investors will know that sanity usually prevails, but it can take time for stocks like hVIVO to find their footing. In the meantime, it's worth remembering this is a business with £47million of contracted revenue already secured for the current year and, as of its last results, £44million in cash.
Yahoo
10-04-2025
- Business
- Yahoo
2 UK stocks and funds to consider buying during this market downturn!
Looking for dip-buying opportunities following recent stock market weakness? Here are two top UK stocks and funds I think merit close attention right now. Amid signs that US 'exceptionalism' could be waning, some analysts believe investors may start to switch their attention to other countries' equity markets. If data from Hargreaves Lansdown is to be believed, this trend could already have started in earnest. The investment platform has said that purchases of UK shares have outweighed those involving US shares by a ratio of 3:1 in recent days. As fears over the economic and political landscape Stateside grow, this is a phenomenon I think could pick up substantially. In this climate, researching a UK stocks fund like the iShares MSCI UK IMI Leaders ETF (LSE:UKEL) could be a good idea. This exchange-traded fund (ETF) tracks the performance of a basket of British stocks, the majority of which are the big beasts of the FTSE 100 and mid-cap growth shares of the FTSE 250. Some of the largest holdings here are Unilever, National Grid, Lloyds and Reckitt Benckiser. In total, the fund has holdings in 144 companies, allowing investors to effectively spread risk. What's more, it's focused on companies with strong environmental, social and governance (ESG) characteristics. This leaves it well placed to harness rising investor demand for ethical shares. Beware, however, that returns could disappoint if market sentiment towards UK-based assets sinks again. Another interesting piece of trading data from Hargreaves Lansdown caught my eye recently. This showed net purchases of gold ETFs up 157% last week compared to the week before. This is no surprise given the yellow metal's role as a safe-haven asset in tough times. Many analysts expect gold prices to take out last week's record high near $3,171 per ounce as macroeconomic and geopolitical uncertainty swells. I myself purchased a fund tracking the performance of a basket of gold mining stocks to capitalise on the metal's continued bull run. And I believe Hochschild Mining (LSE:HOC) could be a great individual stock to consider buying in the current climate. Investing in specific mining stocks like this can be riskier than buying a fund that holds many. Project exploration, mine development and metal production can be rife with setbacks that can smack earnings and share prices. Investing across several companies reduces this risk on overall returns. That said, I believe this risk is more than baked in to the cheapness of Hochschild's share price. City analysts think earnings will soar 103% in 2025, leaving the company trading on a forward price-to-earnings (P/E) ratio of 8.7 times. A sub-1 price-to-earnings growth (PEG) ratio of just 0.1 also underlines the company's cheapness. I also like the fact that Hochschild produces silver alongside gold from its assets across the Americas. Both these metals rise sharply in demand during uncertain times. However, silver's wide use in industrial applications mean it can also rise sharply in price when economic conditions improve. The post 2 UK stocks and funds to consider buying during this market downturn! appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group Plc, National Grid Plc, Reckitt Benckiser Group Plc, and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
Yahoo
15-02-2025
- Business
- Yahoo
Looking for last-minute ISA buys? Here are 2 cheap UK shares to consider
It's human nature to leave certain things to the last minute. The same applies to investing, with many Stocks and Shares ISA investors waiting until the 11th hour to add to their portfolios. Here are two cheap UK shares I think are worth considering before the £20k annual ISA allowance resets on 6 April. I think it's a matter of time before the market drives their share prices higher. Some disappointing operational news has hammered Hochschild Mining's (LSE:HOC) share price in early 2025. Rising costs are an issue for Argentina's miners as inflation rockets again. In January, Hochschild predicted a rise of 5-10% in all-in sustaining costs for 2024, above forecast, and suggested further cost pressures ahead. However, I believe the scale of the sell-off could be unjustified (it's down 14% since 1 January). At 109.6p, the precious metals miner trades on a bargain-basement price-to-earnings (P/E) ratio of just 5.9 times for 2025. Its forward price-to-earnings growth (PEG) ratio, at 0.1, is also below the value watermark of 1. This cheapness is especially surprising given the overall robustness of Hochschild's earnings picture. Production remains strong at the FTSE 250 firm, with forecast-beating output at its Immaculada asset and maiden output at its Mara Rosa mine resulting in a robust final quarter in 2024. On top of this, gold and silver prices are buoyant, and are widely tipped continue soaring as worries over trade tariffs and broader geopolitical turbulence grow. Safe-haven gold hit new peaks around $2,945 per ounce this week, and is up 11% since New Year's Day. Fears over its cost base remain high. So signs of further pressure — for instance, if Argentina's inflation rate worsens — could pull Hochschild's share price lower again. But, on balance, I think the silver giant is a top bargain to think about at today's prices. While Hochschild has suffered in early 2025, Warehouse REIT (LSE:SHED) has had no such problems. Its shares have risen 4.3% in value since January 1. Ye, on paper, the property giant still looks dirt cheap to me. At 82p per share, the real estate investment trust (REIT) trades at a 37.9% discount to its estimated net asset value (NAV) per share. Its forward PEG ratio is 0.7. It also offers great value from an income perspective with its prospective dividend yield sitting at an impressive 7.8%. This, in part, reflects rules that state REITs must pay at least 90% of annual rental earnings out in the form of dividends. Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Warehouse REIT's one of many property stocks that have jumped in 2025. They've risen on signs from the Bank of England that interest rates could fall steadily, boosting firms' NAVs and reducing their borrowing costs. Yet what goes up sharply can also fall if market sentiment changes. Prices here could dip if the interest rate outlook changes (for instance, if inflationary markers tick up again). I believe though, that this scenario's already baked into Warehouse REIT's rock-bottom valuation. For ISA investors, I think it's a great last-minute buy to consider alongside Hochschild. The post Looking for last-minute ISA buys? Here are 2 cheap UK shares to consider appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
