The ongoing geopolitical unrest across the Middle East, Eastern Europe, and East Asia has spurred a climate of uncertainty, driving investors towards the relative safety of gold. In Q3 2023, gold demand outpaced its five-year average by 8%, although it was 6% weaker year-over-year. According to the World Gold Council’s data series, central banks saw the third strongest quarter of net buying, reaching 337 tonnes. year-to-date demand has reached a record 800 tonnes. This strong buying streak from central banks is expected to stay on course for the remainder of the year.
The confluence of geopolitical tensions, robust market demand, and a strong valuation appeal makes a compelling case for considering gold stocks. There’s a tantalizing prospect of riding the wave of gold’s potential upswing, and today we’re featuring an ideal ticker for doing just that.
Trade Alert: Franco-Nevada Corporation (FNV) – Poised for a Turnaround?
As we approach the end of 2023, it’s time to spotlight a noteworthy player in the gold industry, Franco-Nevada Corporation. With a solid market capitalization standing at around $25 billion, this royalty and stream company has been on the radar of many savvy investors. Here are some compelling points to consider:
- Price Levels and Performance: FNV is currently trading around $119, and despite being -21.69% off its 52-week high ($161.25), it’s shown resilience by staying 8.39% above its 52-week low ($116.50). Although the stock has seen a price decrease of -7.48% over the year, the more recent trading session witnessed an upswing, peaking at $135.87 from an opening of $135.70, and closing at $137.47.
- Trading Volume: The trading volume of Franco-Nevada’s shares in the Basic Materials sector reached around 2.17 million for the day, significantly higher than the average daily volume of 0.44 million over the last three months.
- Financial Health: The company boasts a healthy debt-to-equity ratio of 0.00, indicating robust financial stability. This factor can be particularly reassuring for investors in a market where many companies are burdened with high levels of debt.
- Market Capitalization and Valuation: With a market cap of $25.60 billion and a P/E ratio of 38.63, Franco-Nevada holds a substantial position in the market. Though the P/E ratio is on the higher side, the unique business model of royalty and streaming may provide a level of stability compared to traditional mining operations.
- Upcoming Earnings Report: The company is slated to release its Q3 2023 results on November 8th, post-market closed which could potentially be a catalyst for the stock, depending on the financial performance revealed.
- Long-term Growth Prospects: There’s an optimistic outlook among some analysts for a price target of $161.57, indicating potential upside from the current price levels.
- Market Cap Growth: Over the past year, Franco-Nevada’s market cap has grown by 14.44%, signaling a positive trend in valuation and investor confidence.