Good as gold

I’ve always been a bit sceptical about gold as an investment, because it doesn’t pay any interest and has few industrial uses, but there is no arguing with those numbers. You probably should have some exposure to it in your portfolio, especially as it gives you downside protection when markets are falling.

You could simply track the price by investing in a physical gold exchange traded fund (ETF), but if you want a bit more excitement – and risk – you can buy individual gold miners.

Centamin

FTSE 250 listed Centamin (LSE: CEY) is up 30% in the last six months, and 95% over five years, as investors are drawn to a solidly run company that offers direct exposure to gold.

Centamin has also been doing well on its own terms, with first-half production up 8% to 234,096 ounces year-on-year. It also posted EBITDA earnings of $117m, which was 4% better than analysts expected.

Its average realised gold price was $1,305 per ounce, almost double its cash cost of production of just $692. That looks like a handsome margin to me, while $35.7m of free cash flow in the six months to 30 June will help to fund its generous dividends, with the group serving up around $500m in total since 2014. Centamin currently offers a generous forecast yield of 5.3%. It could make a nice portfolio diversifier.

Better still, the £1.13bn group boasts a “strong and flexible balance sheet” with no debt, no hedging and cash and liquid assets of $326.6m. Operating margins are a healthy 25%. However, after recent growth, the gold price is having a slight correction. If the US-China trade war is settled, and markets recover, gold could correct a little. This is worrying as Centamin looks a little expensive trading at 22 times forward earnings.

Trans Siberian Gold

If you want to buckle up for some really exciting gold price action, then book a ride with Trans Siberian Gold (LSE: TSG), the “low cost, high grade” Russia-focused gold miner. Its share price almost quadrupled this year to peak at 132p, although this has reversed in recent weeks, and it currently trades at 103p.

Last month, it posted record first-half revenues of $30m, up 8.7% year-on-year, and a 169.7% rise in profit before tax to $8.5m. Management also finalised the purchase of the licence for the high-calibre Rodnikova deposit, and completed a $7.6m share buyback.

With a market cap of just £88m, we are still talking of a stock-market minnow here. Its growth has been dramatic but you cannot be expecting it to keep racing away at the same breakneck pace.

When people talk about gold being a store of value, they aren’t talking about stocks like these. However, if you are happy to take on a bit of risk with a corner of your portfolio, then Trans Siberian Gold may well be worth further investigation. G.A. Chester reckons its ambition to become a premier mid-tier gold producer looks credible.

The post Want to invest in gold? I reckon these 2 stocks may continue to shine appeared first on The Motley Fool UK.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

With plenty of macro factors offering continuing support for the gold price, including a doveish turn on interest rates by central banks, which UK gold stocks have momentum as star performers?

The table below shows the three top risers of the year to date (YTD), as well as their annualised 5- and 10-year returns.

As you can see, all three stocks are listed on London’s junior AIM market, with Panthera and Xtract very much in the microcap category.

Panthera is an exploration and development company with key assets in India and West Africa. Despite the impressive 236.5% rise to 8.75p YTD, the shares are 56% below their 20p price at listing on AIM less than two years ago.

Xtract Resources is of a similar ilk but seems to have been around forever. At times, its prospects have looked promising but, as those 5- and 10-year annualised returns show, it’s been a serial disappointer.

These microcaps are far too speculative for my risk appetite. However, £75m-cap Trans-Siberian Gold (LSE:TSG) is more interesting, particularly as its YTD performance builds on decent longer-term returns. I’ll come back to Trans-Siberian after first looking at the top-performing stocks YTD on London’s Main Market, summarised in the table below.

As you can see, these Main Market stocks have delivered very decent returns YTD, which is what you’d hope for from what are essentially geared plays on the gold price.

I’ve tipped all three of these stocks in the fairly recent past, as well as currently-unloved FTSE 100 giant Fresnillo (down 27.5% YTD). I think a mini portfolio of profitable and dividend-paying gold and silver miners mitigates the impact of such things as geo-political or operational troubles at any one company. I’ve never looked at the aforementioned AIM-listed Trans-Siberian Gold before, but on examination, it looks very buyable to me for such a portfolio.

Mid-tier gold producer in the making

Trans-Siberian has made good progress since production commenced at its low-cost, high-grade Asacha mine, in 2011. The mine is located in Kamchatka in Far East Russia.

In 2018, it delivered record annual production of 42,128 ounces, and record revenue of $59.8m (£49m at current exchange rates) and earnings per share of $0.113 (9.26p). At the current share price of 86.5p, the trailing price-to-earnings ratio is an undemanding 9.3.

Dividends have become a feature in recent years. The board declared an ordinary dividend of $0.018 (1.394p) and a special of $0.052 (3.979p) last year. The trailing yield is 1.6% on the ordinary and 4.6% including the special.

Management sees good exploration potential in the area of its Asacha mine, and also holds the licence for the development of the Rodnikova deposit, one of the largest gold fields in South Kamchatka. Its ambition to become a premier mid-tier gold producer is credible, in my book.

The post The 3 best gold stocks of 2019 (so far) appeared first on The Motley Fool UK.

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G A Chester has no position in any of the shares mentioned. The Motley Fool UK has recommended Fresnillo. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

It’s since taken a step back on some light profit taking. But make no mistake, investor demand for the safe-haven remains rock-solid. And this was underlined by recent data from the World Gold Council. According to the body, some $5.5bn worth of inflows, equivalent to 127 tonnes, went into global gold-backed exchange-traded funds (ETFs) in June “as geopolitical uncertainty increased and central banks signalled a shift to a more accommodative policy over the coming months.”

More to come?

This was the largest monthly inflow (in dollar terms) since 2012, and there are numerous reasons to expect gold holdings to keep on bulging.

As signs of a more doveish monetary policy from the Federal Reserve have risen, expectations of interest rate cuts from Brussels and London to Beijing have also gained traction. And the relentless stream of poor economic data from all over the globe means the prospect of several benchmark rate reductions is only likely to rise as 2019 progresses.

Throw the unresolved issue of US-related trade wars into the bargain, Britain slipping closer to the Brexit cliff-edge, and Iran showing little signs of backing down in its high-stakes diplomatic spat with Washington, well there’s plenty of reason to expect bullion prices to keep making progress.

But there’s more than one way to capitalise on the rampant gold price right now. Rather than buy physical bars or coins, or invest in one of those aforementioned ETFs, I believe a much better way to make your money work for you is by buying into London’s listed gold producers.

Dividend darlings

Why? The payment of dividends to investors by such mining stocks are extra rewards which don’t come with playing the gold market. And some of the predicted dividends of  these businesses are pretty darn impressive.

Take Pan African Resources and Polymetal Resources and their forward yields around 4.5%. Or Trans-Siberian Gold and its 5.5% prospective yield.

Of course investors need to be prepared to take some of the risk associated with the mining industry, namely uncertainty over potential payloads and unexpected production disruptions which can hammer output levels and ramp up costs.

However, those diggers I’ve mentioned are all making brilliant progress operationally. Speaking of which, Acacia Mining announced this week gold production surged almost 20% year-on-year in Q2, thanks to blowout production in Tanzania. And what’s the forward yield over at this particular share? A monster 6.2%, if you’re asking.

While all of these yields are pretty delicious, it’s possible to get hold of some bigger dividend payers in the near term at least. However, if you’re looking for a blend of jumbo payouts and the possibility of some stratospheric share price gains in the months ahead, you may well be better off ploughing your investment cash into these mining mammoths instead.

The post Hot right now! Are these the best dividend stocks to buy today? appeared first on The Motley Fool UK.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Growth potential

Reporting on Friday was gold producer Trans-Siberian Gold (LSE: TSG). The company reported results for the 2016 financial year. They showed a small rise in revenue of 2.5%, with profit before tax increasing by 32%. Much of this rise was because of an increase in the price of gold. It experienced a rise from $1,146 per ounce to $1,248. However, the company was also able to reduce its cash costs to $426 per ounce from $473 in the previous year. This shows that it is becoming more efficient, which could help to improve its future profitability.

As well as improving profitability, Trans-Siberian Gold also paid its maiden dividend. This equates to a dividend yield of over 10%, although the payout was classed as a special dividend. This means there is no guarantee of further payments in future, although it signifies that the business has sufficient cash through which to invest for future growth.

Looking ahead, the gold price could perform relatively well. The world economy faces an uncertain period, and inflationary forces appear to be relatively robust. This could increase investor demand for the precious metal and cause a further rise in the gold price. This would be positive news for the firm and, while it remains a relatively risky small-cap stock, its high return potential could make it a shrewd buy.

Growth potential

Also offering investment potential within the mining sector is Gem Diamonds (LSE: GEMD). The diamond producer has experienced a somewhat mixed recent period in terms of profitability. In the last five years, its bottom line has increased at a double-digit pace at times, but likewise has also deteriorated sharply in other years. Of course, this has been an uncertain period for the wider sector, with volatility in commodity prices and profitability likely to continue over the medium term.

Therefore, it may be prudent for investors in the industry to seek wide margins of safety before buying. This is in case there are downgrades to forecast growth rates.

Gem Diamonds appears to offer a significant discount to its intrinsic value. It is forecast to report a rise in earnings of 249% in the next financial year. This puts it on a price-to-earnings growth (PEG) ratio of just 0.1, which suggests that it offers growth at a reasonable price. Clearly, further volatility could be ahead, but with a sound strategy and low valuation, it could prove to be a profitable investment over the long term.

The post 2 forgotten small-caps with growth potential appeared first on The Motley Fool UK.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Great time for small oilies?

The rising price of oil is making American oil shale and fracking operations look attractive again, and prices reaching the $50 per barrel level have helped push Pantheon Resources (LSE: PANR) shares upwards. Priced at 186p today, Pantheon shares have soared a stunning 680% in just 12 months!

The company, operating in East Texas, told us in its latest update that planned fracking is underway at its VOS#1 well and that drilling at its VOBM#2H well has commenced, together comprising the company’s fully-funded 2016 programme. That “fully funded” bit is crucial, and with the successful completion of a $30m share placing in March, Pantheon isn’t facing the liquidity pressure crippling some other small explorers. In fact, it’s forecast to generate profits in the year to June 2017, after a modest loss expected for this year.

As always, oil explorers like this are almost impossible to value at this stage. But with Pantheon shares on a P/E multiple of 37.5 for its first year of profit in 2017, if its wells are as productive as hoped and if the price of oil keeps on up, there could be more to come.

Banking on gold

Another commodity recovery, that of gold, is behind the 245% rise in Trans-Siberian Gold (LSE: TSG) shares over the past year. At approximately $1,240 per ounce, the shiny stuff is a long way up from its start-of-year low of around $1,050, and that’s geared up the Trans-Siberian share price to 38p.

Interest rates remaining low for longer than many had hoped have helped whet investors’ appetites for gold, and the likely economic turmoil that a UK EU exit (which would surely have adverse effects way beyond these shores) would cause will have sent many in the direction of safety.

The trouble is, even though Trans-Siberian shares are on low P/E valuations, the company’s cost of production has been variable. The cost of sales of $712 per ounce of gold recorded for the first half last year was 44% lower than the previous year, which is good, but such volatility can work both ways. If costs rise again and gold prices fall, profits could be squeezed.

Queuing for profits

My third is Accesso Technology (LSE: ACSO), a company designing and supplying virtual queuing systems for amusement parks and similar venues. Accesso, previously known as Lo-Q, has been a growth success over the past few years, with a 127% share price rise in 12 months adding to earlier rises to provide a 640% gain over five years.

The downside for me, though, is that the shares appear to be fully valued against future growth expectations. Accesso’s results announcement for 2015 includes details of continuing new contract wins, with Blackpool Pleasure Beach and the One World Observatory in New York among them.

But we’re looking at a P/E of 42.5 based on this year’s forecasts, dropping only to 35.2 for 2017, and PEG ratios in excess of the 0.7 or less that growth investors typically favour. It’s not one for me right now.

The post Can Pantheon Resources plc (+680%), Trans-Siberian Gold plc (+245%) and Accesso Technology Group plc (+127%) keep on soaring? appeared first on The Motley Fool UK.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Shares in bar owner Eclectic Bar (LSE: BAR) have risen by around 31% today after a resumption of trading following suspension. That was due to a pending announcement that the company has agreed to purchase The Brighton Marine Palace & Pier Company for £18m in cash, after which time it plans to rename itself The Brighton Pier Group.

Clearly, the deal seems to have been well-received by the market and comes not long after Eclectic Bar reported an upbeat set of first half results. They showed that it had made a profit of £300k after making a loss in the comparable period and with the acquisition of Brighton Pier set to substantially improve the company’s cash flow, further acquisitions cannot be ruled out.

While Eclectic Bar trades on a price to earnings (P/E) ratio of 35.8, the acquisition could prove to be a game changer for the business. As such, it could be worth a closer look for less risk averse investors – especially since its management team has a good track record with other successful businesses such as Pizza Express.

Ticking clock

Also moving higher today are shares in Xcite Energy (LSE: XEL). They have risen by around 6% at the time of writing, even though there has been no significant news flow released by the company. Of course, Xcite Energy has caused the market a degree of concern of late since it is due to make a major debt repayment in June.

With the company not yet having been able to find a suitable partner for its lucrative Bentley Field in the North Sea, the clock is ticking and it would be unsurprising for Xcite Energy’s share price to remain volatile in the near term.

Of course, Xcite Energy has been able to increase the net present value of the Bentley Field and has also reduced the costs of production. While this represents significant progress for the company, its future remains highly uncertain and although its shares are up today, it may be prudent to await further news on its long term outlook before buying a slice of the business.

Gold look up

Meanwhile, Trans-Siberian Gold (LSE: TSG) is up by around 17% today despite no news having been released by the company. The Russia-focused gold miner has benefitted from an upturn in the outlook for gold this year, with the price of the precious metal benefiting from slower than expected interest rate rises in the US. This has the effect of making non-interest producing assets such as gold more attractive and with the Federal Reserve being more doveish than expected, further price rises cannot be ruled out.

As a result, shares in Trans-Siberian Gold could continue to rise. However, it remains a relatively high risk play and therefore for risk averse investors, a number of the larger and better diversified gold miners may be more prudent purchases at the present time.

The post Are Today’s Movers Eclectic Bar Group PLC, Xcite Energy Limited And Trans-Siberian Gold plc Worth Buying? appeared first on The Motley Fool UK.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Have investors missed the boat, or can these three stocks go on to post further spectacular gains?

This boat has sailed

Shares of AIM-listed Internetq (LSE: INTQ) crashed in December, following the publication of a highly critical report on the Greek mobile technology company. That the author of the report was Tom Winnifrith, who had previously done much to expose the dodgy accounting at Quindell (now Watchstone) and the fraud at Globo, led Internetq — which “does not normally comment on such matters” — to release an initial statement denying “the assertions made and the conclusions drawn” and a further statement responding to specific assertions.

Nevertheless, Internetq’s shares remained thoroughly depressed throughout December and much of January. The catalyst for the lion’s share of the 182% rise seen since the turn of the year was news in early February that founder and chief executive Panagiotis Dimitropoulos and private equity investors, who had pumped €17m into one of Internetq’s businesses, were looking at making a possible offer for the group.

A 180p a share offer came four weeks ago. Internetq is now set to move out of the public spotlight in a stock market delisting, so the boat has certainly sailed with this one.

A recipe for volatility

A recovery in the price of gold in recent months has catapulted the shares of several small gold miners into the ranks of the top risers for the year to date. Trans-Siberian Gold (LSE: TSG), which listed on AIM in 2003, has seen its shares rise by 133%.

As the shares soared, the company released a statement in February saying it was “not aware of any reason for the movement other than the recovery in the gold price and the general macroeconomic environment”.

This is the thing with gold miners: their fortunes are highly-geared to the price of gold. Put together the price of gold, a small company and operations in Russia and you’ve got a recipe for potentially extreme volatility. The shares of Trans-Siberian Gold could easily double again in the coming months; then again, they could just as easily halve. The world of small gold miners is a hugely speculative area of the market, more suitable for casino players than investors.

Longer-term focus

December was a terrible month for education software and services group Tribal Group (LSE: TRB), with its share price crashing to an all-time low under a welter of bad news: a second profit warning; a warning of a potential breach of debt covenants; a proposed rights issue to raise £35m; and a move down from London’s main market to AIM.

The 105% rise in the shares has come on the back of banks agreeing to waive covenants, and the £20m sale of one of Tribal’s businesses, enabling the proposed rights issue to be reduced from the originally-envisaged £35m to £21m.

With the injection of cash restoring the balance sheet to health, and a new management team, Tribal can now focus on the longer-term future. If the company can impress the market with a reduced cost base, improved operating efficiency and a compelling strategic plan from the new chief executive, the shares could make impressive progress over the next few years. A stock investors with a higher tolerance for risk might be interested in looking at.

The post Could Internetq Plc (+182%), Trans-Siberian Gold plc (+133%) And Tribal Group plc (+105%) Double Again? appeared first on The Motley Fool UK.

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G A Chester has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.