Breaking News
Black Friday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

1 Stock With Big Upside Opportunity in 2022

Stock MarketsOct 26, 2021 11:46
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
1 Stock With Big Upside Opportunity in 2022

Markets continue to hit new all-time highs, but some stocks in the TSX Index still look undervalued right now and might be good to buy heading into 2022. Let’s take a look at Barrick Gold (TSX:ABX)(NYSE:GOLD) to see why it might be an interesting pick.

Gold rebound Gold is quietly regaining the ground it lost over the past 12 months, and gold mining stocks are starting to catch the attention of contrarian investors.

The 2020 gold rally saw the precious metal hit a record of US$2,080 per ounce. The gold miners went along for the ride, with many hitting multi-year highs. In the past 12 months, however, the price of gold pulled back to below US$1,700, and the mining stocks got hammered. Barrick Gold, for example, fell from $40 per share to below $22.50 at the end of September.

Gold is now back above US$1,800 per ounce, but Barrick Gold is only trading around $24 per share.

Gold might be catching a bid, as institutional investors shift funds to safe have assets to protect against inflation. Economists and analysts are increasingly predicting high inflation through 2022, making it less transitory than originally forecast.

Investors could also be banking profits from crypto and stock bets and putting the cash in gold to hedge against the next crypto crash or a potential recession driven by high energy prices.

Barrick Gold opportunity In the latest update ahead of the official Q3 results Barrick Gold said it is on track to hit its production targets for the year. The company’s balance sheet is in good shape after a multi-year turnaround effort that saw debt drop from US$13 billion to zero net debt at the start of 2021.

At the current gold price, Barrick Gold generates strong margins. The company’s all-in sustaining costs are lower than US$1,100 per ounce.

Barrick Gold is best known for its gold business, but it also has significant copper operations. The price of copper hit a multi-year high in 2021 and continues to trade at very profitable level for Barrick Gold. At the time of writing, copper fetches US$4.50 per pound. That’s up from US$2 per pound in March 2020.

Copper supplies are tight, and the market should be strong in the coming years due to the expansion of the electric vehicle market.

Dividends Barrick Gold raised its dividend by 12.5% to an annualized rate of US$0.36 when it reported Q3 2020 results last year. The board also gave shareholders a US$750 million return of capital in 2021 that worked out to an additional $0.42 per share.

A large dividend increase could be on the way when Barrick announces Q3 2021 results on November 4. Heading into 2022, if gold holds above US$1,800 per ounce or move higher, another special distribution could be declared.

The bottom line on cheap stocks for 2022 Barrick Gold appears undervalued right now and could deliver strong returns in 2022. If you are bullish on gold over the next few years, this stock looks cheap today for a contrarian portfolio.

The post 1 Stock With Big Upside Opportunity in 2022 appeared first on The Motley Fool Canada.

The Motley Fool has no position in any of the stocks mentioned. Fool contributor Andrew Walker has no position in any stock mentioned.

This Article Was First Published on The Motley Fool

1 Stock With Big Upside Opportunity in 2022
 

Related Articles

My Top 4 Canadian Stock Picks for December 2021
My Top 4 Canadian Stock Picks for December 2021 By The Motley Fool - Nov 26, 2021

Canada reported its highest inflation in 18 years of 4.7% in October, as the world grapples with the energy crisis. The month of December could see energy prices peak as the United...

Canada Housing Is on Fire: 3 TSX Stocks to Buy Today
Canada Housing Is on Fire: 3 TSX Stocks to Buy Today By The Motley Fool - Nov 26, 2021

When this year started, I’d discussed why the Canada housing bull market was well positioned to press on due to strong fundamentals and favourable monetary policy. Canadian...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email