It’s one of the toughest questions to answer this year: amid all the fears and uncertainties in the broader markets, why haven’t gold stocks jumped in valuation? The traditional safe haven asset hasn’t looked good since collapsing in 2013. And despite some promising developments, every move up is seemingly fiercely contested.
Although it’s a tired sentiment, investors should note that this time could really be different. For one thing, the bullion sector, and to a large degree, gold stocks, perform well during periods of market fear. Honestly, what better word describes the current mainstream emotion? Although the benchmark indices have recently put up strong numbers, the Dow Jones is still down 1.6% year-to-date.
Next, we have to consider the Trump factor. Our President doesn’t lack anything in the confidence department, but political competency is another matter. No, I’m not delivering a cheap shot at our Commander-in-Chief. Rather, I’m suggesting that his diplomatic skills will be tested in a baptism of fire. Maybe it will work out, or maybe it won’t. Either way, gold stocks to buy don’t seem like a bad idea!
Finally, gold prices may see a seasonality boost. Since 1999, the second quarter on a year-over-year basis produces the strongest gains. Granted, the margins are small: the second quarter averages 10.1% YOY returns, while the worst quarter (the first) produces 9.6% returns. Still, it is a statistical advantage.
With all that’s going on right now, precious metals are a smart play. Here are seven gold stocks that will find a momentum burst this spring!
Best Undervalued Stocks To Own For 2019: Las Vegas Sands Corp.(LVS)
Although Las Vegas Sands Corp. (NYSE:LVS) has put its expansion in the U.S. on hold while it explores international opportunities, it still has a couple of nice hotels to welcome you — The Venetian and The Palazzo — should you be going to Vegas this summer.
However, Macao is where LVS generates the lion’s share of its adjusted property EBITDA — 53% of $1.5 billion in Q1 2018 — with Singapore adding another 26% and the U.S. the remaining 11%.
The company’s future developments in Macao, Singapore, Japan and South Korea, which include two of more than $10 billion, will be financed with up to 35% of the cost with LVS stock and the remainder with debt. The goal is to produce at least a 20% return on invested capital on these developments.
Now that Steve Wynn’s out of the game, it seems Sheldon Adelson’s Las Vegas Sands will have the last laugh.
Best Undervalued Stocks To Own For 2019: Arista Networks, Inc.(ANET)
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Based in San Jose, California, Arista Networks (NYSE:ANET) provides cloud networking solutions to 4,000 customers across five continents.
Arista specializes in high-speed network switches that enable cloud service providers, internet companies and data centers to run faster networks. Arista also provides technical support, hardware repair and parts replacement.
When it comes to the lucrative high-speed network switches market, Arista Networks goes toe-to-toe with Cisco Systems (NASDAQ:CSCO). But while its larger competitor is struggling to grow sales and earnings, Arista Networks is growing by leaps and bounds.
Part of ANET’s competitive advantage is that it isn’t tied down to legacy systems like CSCO is. Its equipment is next generation, built for the next iteration in networking and cloud services.
It has had a bumpy ride in 2018, but this is a long-term player with huge potential. It is a force in crucial megatrend sectors that will grow regardless of economic ups and downs.
Best Undervalued Stocks To Own For 2019: KB Home(KBH)
The smallest stock on our list with a $2.5 billion market cap, KB Home is set up to be a great buy at the current price level.
The company shows strong fundamentals, with revenues jumping 22%, deliveries up 11%, and increased net income in 2017.
Get long now in the $28.60 per share zone with a target price of $35.00 per share and initial stops set at $25.77 per share.
Best Undervalued Stocks To Own For 2019: DryShips Inc.(DRYS)
Shares of dry bulk shipping outfit DryShips Inc. (NASDAQ:DRYS) are surging nearly 13% higher on Thursday to break up and out of a long sideways pattern going back to October/November. The shipping industry has been plagued by fleet overcapacity resulting in pressure on charter rates.
But with a possible trade deal with China looking likely, the need to use dry bulk ships to transport American grain and soybeans across the Pacific Ocean will only grow.
The company reported a profitable quarter at the beginning of May, with adjusted operating earnings of $12.9 million versus a loss of $7.4 million the year before.