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Gold-Mining ETFs Losing Their Shine Following Torrid 2025 Rally
Gold-Mining ETFs Losing Their Shine Following Torrid 2025 Rally

Yahoo

time06-06-2025

  • Business
  • Yahoo

Gold-Mining ETFs Losing Their Shine Following Torrid 2025 Rally

(Bloomberg) -- Investors are exiting exchange-traded funds that track the shares of gold-mining companies, a sign that the high-flying sector's allure may be dimming even as prices for the precious metal remain strong. Next Stop: Rancho Cucamonga! ICE Moves to DNA-Test Families Targeted for Deportation with New Contract Where Public Transit Systems Are Bouncing Back Around the World US Housing Agency Vulnerable to Fraud After DOGE Cuts, Documents Warn The Global Struggle to Build Safer Cars Gold-mining stocks have soared this year, outpacing the 24% climb in gold prices and leaving the broader S&P 500 Index in the dust as investors sought haven assets amid worries over global trade and massive government spending. The VanEck Gold Miners ETF, the largest exchange-traded fund tracking the group, is up 57% year to date. That performance hasn't stopped investors from heading for the exits in recent months. Van Eck's fund has seen net outflows every month so far this year, except for May. Others are feeling similar selling pressure: The Sprott Gold Miners ETF saw outflows in May even as bullion prices set a record high. 'People are actually selling their shares of gold-mining ETFs into the rally,' said John Ciampaglia, CEO and senior managing director at Sprott Asset Management LP. 'We're not seeing new money, as a whole, come into the sector.' A range of factors is fueling the outflows. Years of budget overspending by gold-mining companies have made investors wary of holding their shares for too long, even though some miners have grown more disciplined on expenditures, said Greg Taylor, chief investment officer at PenderFund Capital Management Ltd. 'Most people view it as a trading sector rather than a buy-and-hold sector,' he said. The furious rise in mining shares may have also left traders seeking gains in other corners of the market, such as tech stocks and bitcoin, Taylor added. The tech-heavy Nasdaq 100 Index is up 10% since the end of April, compared to an 8.4% rally in the Van Eck ETF. BofA Securities analysts urged investors to 'buy oil, not gold' in a May 29 research note, saying the two asset classes 'are trading at polar ends of the relative value spectrum.' The bank noted that the S&P 500 is trading at its highest multiple relative to the price of West Texas Intermediate crude since the pandemic, making a good entry point for oil, while trading in-line with its historical average multiple relative to gold. Central Banks Still, proponents of precious metals have been quick to point out the sector's more attractive features. Among these is how the shares are valued relative to companies' earnings: despite their recent rally, mining stocks are relatively cheap on a historical basis, as the rising gold price has juiced profits. Shares of Newmont Corp., the biggest miner by market capitalization, trade at 13 times future earnings, compared to an average of 20 over the last five years. Scotia Capital Inc. analyst Ovais Habib wrote in a Thursday note that gold-mining stocks are trading as if their total gold resources are valued at $1,454 per ounce, well bellow the spot gold price, which stood at $3,380 an ounce on Thursday afternoon. Brooke Thackray, a research analyst at Global X, said lower input costs in the form of cheaper oil and diesel prices can help miners' returns in coming quarters by boosting cash flow. Another supportive factor is steady gold buying by central banks, which some analysts expect to continue pushing gold prices higher and buoy miners' shares. Central banks have been buying 80 metric tons of gold each month, analysts at Goldman Sachs estimate. Taken together, central banks and sovereign wealth funds have been mopping up 1,000 tons a year, at least a quarter of annual mined production, according the World Gold Council. 'They've been in the market and they're really price-indiscriminate,' Thackray said. Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Is Elon Musk's Political Capital Spent? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To The SEC Pinned Its Hack on a Few Hapless Day Traders. The Full Story Is Far More Troubling ©2025 Bloomberg L.P. Sign in to access your portfolio

Denison Mines Corp. (DNN): Among the Best Uranium Stocks to Invest in According to Analysts
Denison Mines Corp. (DNN): Among the Best Uranium Stocks to Invest in According to Analysts

Yahoo

time25-04-2025

  • Business
  • Yahoo

Denison Mines Corp. (DNN): Among the Best Uranium Stocks to Invest in According to Analysts

We recently published a list of . In this article, we are going to take a look at where Denison Mines Corp. (NYSEAMERICAN:DNN) stands against other uranium stocks to invest in. Nuclear power is making a notable comeback. More than 20 countries pledged to triple nuclear energy by 2050 at the COP28 summit. Nuclear power is considered crucial for lowering emissions, and it is gaining support from both environmental advocates and US national security interests, though for different motivations. Big tech companies are also getting involved as they hunt for more energy to power massive data centers. Uranium is not presently categorized as a 'critical mineral' by the US Geological Survey (USGS) because it is classified as a fuel mineral. However, President Trump is pushing for its inclusion in the list, which would gather federal support and speed up project approvals. This seems like a sensible play on Trump's part, as demand for uranium is climbing, and the US relies almost entirely on imports, with most of the world's supply originating from a handful of countries. Uranium prices were at a 16-year high in 2023 and, while they have dipped marginally, they remain higher than at any time since Fukushima in 2011. In December 2024, John Ciampaglia, CEO of Sprott Asset Management, told CNBC that the uranium industry had been on life support for nearly a decade after Fukushima, and there needed to be better supply discipline in the market. Uranium producers need to ensure that future supply matches demand. He noted that three factors supported the industry – first, the growing electrification in China, India, and other developing countries, secondly, energy security and decarbonization are putting the focus back on nuclear fuel as an energy source, and third, tech companies are now investing in the development of small modular reactors. He also commented on uranium spot and market prices, which are gradually moving upward. He believes uranium prices need to go higher to incentivize chemical producers and miners to increase production and build new mines, which is critical to developing uranium as a reliable electricity fuel in the coming decades. Current supply shortages, higher long-term prices, and forecasts for record nuclear energy production in 2025 all point to a positive future. With that industry outlook in mind, let's take a look at the best uranium stocks to buy according to analysts. An open pit mine with a large yellow excavator machine with tailings visible in the background, illustrating the uranium extraction process. For this article, we searched credible websites and compiled an extensive list of US-listed uranium stocks. Next, we manually searched for the average upside potential of each stock and selected 12 stocks with the highest values. The list below is ranked in ascending order of the upside potential as of April 19. We have also mentioned the hedge fund sentiment as of Q4 2024. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). Number of Hedge Fund Holders: 31 Average Upside Potential: 100.72% Denison Mines Corp. (NYSEAMERICAN:DNN) ranks 7th on our list of the best uranium stocks, with an average upside potential of 100%. DNN is a Canadian uranium exploration and development company. It holds a majority ownership stake in the Wheeler River project in northern Saskatchewan's Athabasca Basin. On April 4, investment advisory Desjardins started coverage of Denison Mines Corp. (NYSEAMERICAN:DNN) with a Buy rating and a price target of C$4. Analyst Bryce Adams from Desjardins highlighted Denison Mines' 95% ownership of the Wheeler River project, which is nearing the end of permitting and is expected to begin construction in early 2026. He sees minimal financial risk, despite a C$275 million funding gap, due to Denison's strong market position. In late 2024, Denison Mines Corp. (NYSEAMERICAN:DNN) made a deal with Cosa Resources, giving Cosa a 70% interest in three of its uranium properties in Saskatchewan's eastern Athabasca Basin. In exchange, Denison received about 14.2 million Cosa shares, $2.25 million in deferred equity, and a $6.5 million commitment from Cosa to fund exploration on the sites. The deal closed in January 2025, making Denison Cosa's largest shareholder with just under 20% ownership, and the two companies have now partnered on three uranium exploration joint ventures. According to Insider Monkey's fourth quarter database, 31 hedge funds were bullish on Denison Mines Corp. (NYSEAMERICAN:DNN), compared to 23 funds in the prior quarter. Hood River Capital Management was the largest stakeholder of the company, with 26.6 million shares worth nearly $48 million. Overall, DNN ranks 7th among the best uranium stocks to invest in according to analysts. While we acknowledge the potential of DNN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than DNN but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: and . Disclosure: None. This article is originally published at Insider Monkey.

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