Gold Penny Stocks – Top 10 Penny Stocks to Watch in 2019
Gold has been languishing for nearly a decade, but many analysts predict a breakout in 2019. Penny stocks for gold mining companies offer an interesting way participate in future increases in the price of gold. Low-priced gold penny stocks could shine in the coming months while the stock market grapples with global trade wars, geopolitical tension and rising inflation. Read on for gold penny stocks and the top 10 penny stocks to watch…
Is Gold a Good Investment?
Uncertainty in the market will always make investors look for safe haven assets to balance their portfolios. Persistent economic tension could keep gold prices on a firm footing throughout 2019. Before investing in gold stocks, though, you need to be prepared to deal with volatility. Gold is a commodity and as such, the price can be volatile. Commodities are raw materials often heavily used in industry and commerce. Price depends on industry supply and demand dynamics – which can be unpredictable. Also, penny stocks are notorious for explosive price movements – so beware.
The gold industry is a capital-intensive, and made up of companies at different steps of the production process. Some are in an early exploration stage. Others are developing operations based on successful evaluations and trials. Still others are expanding and are full-fledged mining operations. Gold itself has long been viewed as a safe haven in times of geopolitical uncertainty. Investments in gold have been used for both portfolio diversification and as a hedge against US currency weakness and inflation. Gold has a reputation as a storehouses of value and preserver or wealth. It is estimated that over two-thirds of gold demand is for by the jewelry sector. Other uses for gold include tooth fillings, electronics manufacturing and collectibles, although they make up a very slim portion of overall demand.
Why Should You Invest in Gold Stocks?
The most direct way to own gold is to buy physical gold. This can be done in a variety of forms – bars, coins, medals, or even jewelry. Gold ownership gives you a direct exposure to gold prices. But buying physical gold also means you have to pay high commissions. You also have additional costs and risks related to transportation, storage, and insurance of the precious metal. However, you can buy shares of stocks from companies that mine stocks that actively engage in the production and development of gold deposits. You avoid the premium you’d pay if you purchased gold directly and you don’t have to pay to store any physical gold. Plus, the value of your shares could easily rise over time. It’s as easy as a phone call to your stock broker or the click of a keyboard for an online trade.
Gold-mining stocks, or mutual funds that invest in them, offer potentially higher returns than buying gold itself. When gold value goes up, gold-mining stocks go up even more — sometimes as much as three times more — because of the boost to mining-company profits. The catch is that when gold loses value, stocks could also drop up to three times as fast. Successful mining companies can cut losses, however, by cutting costs. And if stock prices go down, that makes it more affordable to buy more stock, anticipating that the price will rise again.
Why Invest in Gold Penny Stocks?
Gold penny stocks are gold companies that trade under $5 per share and have a small market capitalization. Even though they are considered small caps, the best gold penny stocks release financial disclosures. Investors rely on this important information to make decisions. Trading gold penny stocks is risky because many of these companies are in a developmental stage. They are not generating income from the production of gold and are heavily dependent on outside financing to keep their business alive.
Penny stocks usually cost quite a bit more than a penny. The SEC Defines a penny stock as anything selling for under $5/share. Smaller start-up companies with less than $10 million in assets are more likely to issue penny stocks than larger corporations. Penny stocks issued by small companies are not usually traded on the regular stock exchanges. Instead, small cap penny stocks are traded over-the-counter through the use of electronic quotation systems called OTC Bulletin Board and OTC Pink Sheets.
Can Penny Stocks Trade on the NYSE?
There are numerous stocks trading on big exchanges like NYSE and NASDAQ priced at under $5. These were once much larger companies that have fallen on harder times. Most investors don’t think of these as penny stocks, but technically speaking, they are. Yet they are still subject to all the financial and reporting requirements as dictated by the NYSE and NASDAQ. To continue to trade on the NASD or NYSE, firms must adhere to financial, accounting, and regulatory requirements – even if their stock prices dip below the $5 per share level.
What better way to lock in a potential gold run-up than through the leverage of undervalued gold mining penny stocks? What better way to own a gold penny stock than to find one that is traded on the NASD or NYSE and is still subject to all the regulatory requirements and financial accounting disclosure.
Why Gold Penny Stocks Can Have Explosive Moves
Gold penny stocks are not covered by an army of analysts like Amazon or Apple would be. Without the help of institutional research, gold stocks can see large price swings from limited coverage and information. Without analysts, investors rely more on press releases and blog reports to formulate opinions on the company’s fundamentals. Since these are low priced stocks with a small market cap, investors understand potentially large price swings. If a gold penny stock moves from $1 to $3 per share, that is a 200% return. If a gold stock moves from $101 to $103 per share, that is a 2% gain. Both stocks gained $2 per share, but on a percentage basis, there is no comparison. Gold penny stocks give investors a low barrier to entry. You can buy a lot more shares at $1 per share than $100 per share.
Trading gold penny stocks is risky because many of these companies are in a developmental stage. They are not generating income from the production of gold and are heavily dependent on outside financing to keep their business alive. But with great risk comes the potential for great reward.
Characteristics Of The Best Gold Penny Stocks
Transparency
The best gold penny stocks are transparent. This means they supply investors with essential data to make informed decisions. For example, companies on the Pink Sheets are not required to meet minimum requirements or file with the SEC. They are named because they were actually printed on pink paper. The Pink Sheets started out as a daily quote service provided by the National Quotation Bureau. In 2010, it changed its name to OTC Markets Group.
Liquidity
Trading liquidity risk is sometimes referred to as market liquidity risk. This is the risk that you will not be able to sell your stocks within a reasonable amount of time at a decent price. The quicker a particular stock can be sold at a reasonable price, the more liquid it is. The longer it takes to sell a particular asset at a reasonable price, the less liquid it is. A “thin” stock is one that doesn’t trade a lot of volume on a daily basis, typically anything under a couple hundred thousand shares traded daily is considered thin. Its difficult to build a large position and execution could get sloppy if you decide to trade a thinly traded gold penny stock.
Value
Cheap doesn’t always mean good value It’s true that low priced stocks have the potential to rise dramatically if they receive a positive catalyst. However, buying a stock only because it has a low price is not a good practice. There are several important factors worth considering. Check financial data first, like return on equity, balance sheet, and current assets. Then look at company management, project outlook, and anything else you can find before deciding to invest in a gold penny stock.
Wall Street does not cover most of the gold penny stocks that are traded on the market. That means you have to research the stocks yourself before investing in them. The lack of institutional research has opened the door for bloggers and newsletters to have an influence on this space. However, make sure that what you’re reading is unbiased and not coming from someone who is “talking up their position.” The same goes when you’re looking for information on social media. Ask yourself, is the poster sincere or are they just trying to pump their position so they can dump and run?
Fundamentals
Investing in a gold-mining company is like investing in any stock: You have to do your homework if you want to see a good return. Before you invest, find out if the company you’re looking at has a history of steady production. Read the company’s annual reports and learn if they’re laboring under a mountain of debt. Research the current managers and their track record. If a company’s fundamentals are sound, that’s a good reason to invest.
Gold Penny Stocks – Top 10 Penny Stocks to Watch
Kinross Gold Corporation (NYSE:KGC)
Kinross Gold Corporation is a gold mining company. The Company is engaged in gold mining and related activities, including exploration and acquisition of gold-bearing properties, the extraction and processing of gold-containing ore, and reclamation of gold mining properties. The Company’s segments include Fort Knox, Round Mountain, Bald Mountain, Kettle River-Buckhorn, Kupol, Paracatu, Maricunga, Tasiast and Chirano.
Kinross Gold Corporation is a gold mining company. The Company explores, acquires and actively mines gold-bearing properties. The Company holds interest in the following properties:
- Fort Knox mine, an open-pit gold mine near Fairbanks, Alaska
- Round Mountain gold mine located in Nye County, Nevada
- Bald Mountain gold mine, an open-pit mine is located in Nevada
- Kettle River-Buckhorn an underground mine located in northern Washington State near the Canadian border.
- Kupol, an underground mine located in the Chukotka region of the Russian Far East
- Paracatu, an open pit mine located in the State of Minas Gerais, Brazil
- Maricunga, anopen pit mine located 120 kilometers northeast of Copiapo, Chile
- Tasiast mine, an open pit operation located in north-western Mauritania
- Chirano, an open-pit and underground operation located in southwestern Ghana
The Company’s gold production and exploration activities are carried out in Canada, the United States, the Russian Federation, Brazil, Chile, Ghana and Mauritania.
Golden Star Resources Ltd (GSS)
Golden Star Resources Ltd., is a gold mining and exploration company. The Company incorporated on May 15, 1992. Business segments include Wassa, Bogoso/Prestea, Other and Corporate. Through its subsidiary, Golden Star (Wassa) Limited, the company owns and operates the Wassa open-pit gold mine, the Wassa underground mine and a carbon-in-leach (CIL) processing plant (Wassa), located northeast of the town of Tarkwa, Ghana. Through its subsidiary Golden Star (Bogoso/Prestea) Limited, the company owns and operates the Bogoso gold mining and processing operations (Bogoso), the Prestea open-pit mining operations and the Prestea underground development project located near the town of Prestea, Ghana. The Company holds interests in various gold exploration projects in Ghana and other parts of West Africa, and in South America it holds and manages exploration properties in Brazil.
Gold Resource Corp (NYSE: GORO)
Gold Resource Corporation is an actively producing mining company. It incorporated on August 24, 1998. The Company is a producer of metal concentrates that contain gold, silver, copper, lead and zinc. They also produce dore containing gold and silver at the Aguila Project. The Company has two units in North America, the Oaxaca Mining Unit and the Nevada Mining Unit. Its assets are located at its Oaxaca Mining Unit, located on its Aguila Project. Assets include Aguila milling and smelting facility and Arista underground mine. The Aguila milling and smelting facility produces metal concentrates and dore from ore mined from the Arista Mine. All of its production and revenue comes from its Oaxaca Mining Unit.
IAMGOLD Corporation (NYSE:IAG)
IAMGOLD Corporation was incorporated in 1990 and is headquartered in Toronto, Canada. It explores, develops, and operates gold mining properties in North and South America, and West Africa. IAMGOLD also explores for copper and silver. The company owns interests in properties located in Suriname, South America; Burkina Faso, West Africa; Québec, Canada; and Mali, West Africa. The Company’s portfolio of operating gold mines, includes The Rosebel gold mine, Essakane Gold Mine, Burkina Faso, Westwood Gold MinenCanada,
It holds interests in various other projects, including the Boto gold project in Senegal; the Pitangui project in Brazil; the Siribaya project in Mali; the Loma Larga project in southern Ecuador; and the Eastern Borosi project in Northeast Nicaragua. IAMGOLD Corporation was incorporated in 1990 and is headquartered in Toronto, Canada.
Eldorado Gold Corporation (NYSE:EGO)
Eldorado Gold Corp is a Canada-based gold exploration, development and mining company. The Company’s geographical segments include Turkey, Brazil, Greece, and Romania among others. Eldorado’s activities involve all facets of mining, including exploration, development, production and reclamation. The company has headquarters in Vancouver, British Columbia, Canada, and operates in five countries. It employs over 4,800 people worldwide and has over 25 years of experience in building and operating mines around the world.
Gold Fields Ltd (NYSE:GFI)
Gold Fields Ltd. is one of the world’s largest producers of gold, with operations in South Africa, West Africa, and Australia. In 2003, the company’s annual gold production reached more than 4.3 million ounces of gold, while its mineral reserves level stood at 81.5 million ounces. Gold Fields’ wholly owned mines include Driefontein, Kloof, and Beatrix. Its international arm overseas includes Ghanaian and Australian mines, along with the Arctic Platinum Partnership in Finland. Gold Fields was created in 1998 after the merger of Gold Fields of South Africa Ltd. and Gencor Ltd.
The Company produces gold and holds large gold reserves. It is involved in underground and surface gold and copper mining and related activities, including exploration, development, extraction, processing and smelting. It has approximately eight producing mines located in South Africa, Ghana, Australia and Peru.
B2Gold Corp (NYSE:BTG)
B2Gold Corp. is a Canada-based gold producer with four operating mines and one mine under construction. The Company has a portfolio of other evaluation and exploration projects in various countries, including Mali, Colombia, Burkina Faso, Finland, Chile and Nicaragua. Headquartered in Vancouver, Canada, B2Gold Corp. is one of the fastest-growing gold producers in the world. Its controlling shareholder is the US investment fund Fidelity Management and Research Company.
New Gold (NYSE:NGD)
New Gold Inc is a Canada-based gold mining company. The Company has a portfolio of four producing assets: The New Afton and Rainy River Mines in Canada, the Mesquite Mine in the United States and the Cerro San Pedro Mine in Mexico. In addition, the Company is an owner of the Blackwater project located in Canada. The assets produce gold, with copper and silver by-products. The Company is working towards maximizing shareholder value through diversified production, maintaining a reduced risk profile and enhancing growth potential.
Many of its mines hold significant resources in more than one base metal – primarily gold, silver and copper. It explores and produces in North America (US, Mexico, and Canada), South America (Chile, Brazil) and Australia.
Harmony Gold Mining Company Ltd (HMY)
Harmony Gold Mining Company Limited, incorporated on August 25, 1950. Through its subsidiaries, it is engaged in gold mining and related activities, including exploration, extraction and processing. The Company’s segments include South Africa Underground, Surface, and International. The South Africa Underground segment includes Kusasalethu, Doornkop, Phakisa, Tshepong, Masimong, Target 1, Bambanani, Joel, Unisel and Target 3. The Surface segment comprises the Company’s other surface operations. The Company’s International segment comprises Hidden Valley Project with operations in South Africa and Papua New Guinea (PNG). The Company’s principal product is the Gold bullion. Exploration projects include Golpu project and Kili Teke prospect. The Company has approximately nine underground mines, one open pit operation and several surface sources in South Africa. Subsidiaries include Lydenburg Exploration Limited, Tswelopele Beneficiation Operation (TBO) and Harmony Copper Limited.
McEwen Mining Inc (MUX)
- Mexico – The Mexico Operations segment includes properties, such as El Gallo 1 mine and the El Gallo 2 project.
- Minera Santa Cruz – The MSC segment includes properties, such as the San Jose mine and other concessions located around the mine. The San Jose mine is an underground operation located approximately 20 kilometers north of Goldcorp’s Cerro Negro project in the northwest corner of the Deseado Massif region of Province of Santa Cruz in Argentina.
- Nevada – The Company’s properties in Nevada segment include Gold Bar project and exploration properties. The Gold Bar project is a proposed mine project. The property is located within the Battle Mountain-Eureka-Cortez gold trend in Eureka County, central Nevada.
- Los Azules – This segment includes various properties, such as Los Azules project, Chonchones project, Laganoso project, La Cerrada project and Other Argentina properties. The Los Azules copper project is an advanced-stage porphyry copper exploration project located in the cordilleran region of San Juan Province, Argentina near the border with Chile.
Gold Reserve Inc (GDRZF.PK)
Diversify With Top 10 Penny Stocks
Most gold penny stocks don’t survive. If they are unable to generate revenue, they eventually drown in debt. Instead of putting all your eggs in one basket, diversify and avoid putting a large portion of your portfolio in one single position. Diversification is a risk management strategy that mixes a variety of investments within a portfolio. The objective is that a portfolio constructed of different assets will, on average, lower the risk of any individual holding or security. Selecting the best from a list of top 10 penny stocks should help your odds of finding a winner while spreading losses.
Bottom Line
Stick to trading transparent gold penny stocks. Select stocks that have control of their finances and are not bleeding in debt. When investing in these early stage companies, make sure to read about the management of the firm. Find out what their previous work history is, and if they have had success or failure with any other publicly traded company. Be skeptical on what you read from blogs and newsletters. Always question any unsolicited “hot” stock tip you receive. You don’t know what the hidden agenda might be. Visit the company website and make sure to read their disclosures. Learn all you can about how their operations work and what future projections are. Eventually you’ll start seeing patterns of what successful gold penny stocks have in common. Hopefully, you’ll be able to find new ones before they have an explosive move.
Gold Stocks that pay Dividends
Owning Gold stocks is a way to enjoy increases in the price of gold with growth potential if the stock itself appreciates in value. Wouldn’t it be great to have the security of owning gold AND the growth potential of stock appreciation AND a steady stream of income in the form of regular dividend payouts? It’s possible, and you can do this by investing in gold stocks that pay dividends.
For more information, check out the article: “Gold Stocks that pay Dividends”
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