Forward Guidance
Gold Stocks Are Undervalued | Imaru Casanova (VanEck Fireside Chat #4)
Sep 6, 2024
Imaru Casanova, a Portfolio Manager specializing in Gold and Precious Metals at VanEck, discusses the undervaluation of gold stocks amidst rising gold prices. She highlights the importance of cash flow over earnings in mining evaluations and emphasizes common mistakes investors make. Casanova also delves into the effects of jurisdiction on mining company valuations and the unique strategies of royalty companies. The conversation uncovers both opportunities and risks in the dynamic gold market, making it a critical listen for investors.
01:07:29
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Quick takeaways
- The recent surge in gold prices, influenced by geopolitical tensions and increased central bank purchases, suggests that gold stocks may be undervalued.
- Investing in gold mining stocks necessitates a focus on cash flow analysis over net earnings to better gauge profitability and sustainability.
Deep dives
Current Trends in Gold Prices
Gold prices have experienced a significant increase, with a rise of around 30% over the past year. This upward trend is attributed to various factors, including increased geopolitical tensions worldwide, which have led to gold being viewed as a safe haven. Moreover, central banks have ramped up their gold purchases, particularly following the onset of the Ukraine crisis, resulting in record levels of net buying by these financial institutions. The demand from Asian consumers, specifically for physical gold and jewelry, has also played a crucial role in driving prices higher.
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