Gold Mining Stocks Get a Thumbs Up from UBS Analysts

Alessia Pierdomenico / Bloomberg via Getty Images UBS said to be selective in choosing which gold mining stocks to invest in

Key Takeaways

UBS analysts tell clients they're upbeat about gold mining stocks. The analysts note shares of gold miners have outperformed the price of gold this year. However, UBS said to be selective in choosing which gold mining stocks to invest in.

Gold mining stocks are getting a positive review from UBS.

The analysts wrote in a note to clients that miners are enjoying "some time in the sunshine," and that after a "poor track record in recent years," they're starting to rebuild investor confidence and trust.

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UBS noted that while gold prices have been range-bound over the past three months, the VanEck Gold Miners ETF has outperformed the price of gold by 15%, and it's outperformed gold by more than 40% year-to-date.

The analysts said if gold prices remain steady, they see gold mining firms increasing stock buybacks this year, accelerating organic growth projects, and potentially taking part in more merger and acquisition activity.

However, despite their optimism, they explained that they have "become more selective shifting preference from 'relatively expensive outperformers' to some of the 'cheaper turnaround stories.'" UBS's top gold mining stocks are Barrick Mining (B), Endeavour Silver (EXK), Kinross Gold (KGC), AngloGold Ashanti (AU), and Franco-Nevada (FNV).

The VanEck Gold Miners ETF is trading at its highest level since November 2011. TradingView

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