Disclosure: The following represents my opinions only. I am long ABX, ASCU, BNE, BSX, CDR, DPRO, EQX, FOM, HSLV, IMP, KNT, LTC, MMA, NEM, NICU, NRN, NXE, POET, RAK, TAO, TLO, TNZ, TUK (image credit to Luca on Unsplash)
Everyone knows the addage, “You’ve got to make hay while the sun is shining” and that couldn’t be more true of the resource sector right now. As the markets continue to climb the Wall of Worry, the broader indexes are at their highs and many of the stocks in the resource sector are no exception. Gold has broken out to the upside, trading at well over US$3500/ounce as I type this, and many of the base metal stocks aren’t doing to shabby at the same time. Broadly speaking, gold and resource stocks appear to offer great value relative to the market with strong balance sheets and high free cash flows common among quality companies. Interest in the developers and the explorers is resilient and investors are receptive to new ideas, evidenced by indexes like the TSX Venture (the hallmark of Canadian junior resource interest) trading at 52-week highs. Stepping back and looking at a 5-year TSX-V chart though shows that the Venture is still well off its highs with plenty of room to run in light of what gold is doing and the discounts to NAV exhibited by many companies. Meanwhile, sentiment towards the energy sector is generally muted, but the valuations there are still compelling for value/contrarian types like me. All in all, this is a fertile market environment and those who follow resources closely know it. Sticking with quality companies, run by quality teams, with quality assets continues to be a winning strategy, so below I run through some of the names that I’m liking for varied reasons.
I often get emails from readers asking me to add them to the distribution list for the blog, so I’ve added a mechanism for that below. There’s a lot of ground to cover, so let’s get started…