Value exists in every sector. However, some sectors show much better fundamentals and overall value than others. The precious metals producers listed in Toronto are among the best value picks for investors right now on a number of metrics.
The valuations of many of these producers is lagging behind the sharp increase in the price of gold we’ve seen of late. Most models show producers’ cash flows are only forecasted out of a long-term average price of gold around $1,400 U.S./oz.
Of the various TSX-listed gold producers, Kirkland Lake Gold (TSX:KL) has been my top pick in this sector for some time. This is due in large part to the company’s excellent operating metrics and stellar balance sheet. The gold producer has no debt, one of the lowest costs of production, and one of the highest returns on invested capital (ROIC). Further, the company is increasing production levels at its operating mines.
As far as I’m concerned, from a fundamentals standpoint, no gold producer beats Kirkland Lake on the totality of metrics most value investors consider. The company’s world-class management team has done an incredible job of creating shareholder value, using investor capital well and building a business that is incredible strong, robust, and recession-resistant.
This is potentially the best gold producer in the world today, and I’d highly recommend investors take a look at the company’s financials for more information.
Invest wisely, my friends.