Month: February 2025

Forget Gold and Silver: The Growth Potential of Platinum and Palladium

by Fred Fuld III

Platinum and palladium, members of the platinum group metals (PGMs), are renowned for their unique properties, including resistance to corrosion, high melting points, and exceptional catalytic capabilities. These characteristics make them indispensable across various industries:

  • Automotive Industry: Both metals are crucial components in catalytic converters, which reduce harmful emissions from vehicles.
  • Jewelry: Their lustrous appearance and durability make them popular choices for high-end jewelry.
  • Electronics: Utilized in the manufacturing of hard drives, fuel cells, and other advanced electronic devices.
  • Medical Devices: Employed in pacemakers and dental instruments due to their biocompatibility.
  • Green Energy: Essential in hydrogen fuel cells, supporting the transition to cleaner energy sources.

As global industries strive for sustainability and stricter emission standards, the demand for PGMs is poised to grow, presenting potential opportunities for investors.

Top Platinum and Palladium Stocks to Consider

1. Anglo American Platinum (ANGPY)

Anglo American Platinum stands as the world’s leading primary producer of platinum, operating extensively in South Africa. The company supplies PGMs to various sectors, including automotive and industrial markets.

  • Market Capitalization: Approximately $8.36 billion.
  • Price-to-Earnings (P/E) Ratio: 13.38.
  • Dividend Yield: Forward dividend yield stands at 20.73%, with a total yield of 3.43%. Morningstar

Anglo American Platinum’s robust financial metrics and commitment to sustainable practices make it a compelling option for investors seeking exposure to the PGM sector.

2. Impala Platinum Holdings (IMPUY)

Impala Platinum Holdings, commonly known as Implats, is a significant player in the PGM mining industry, with operations spanning South Africa, Zimbabwe, and Canada.

  • Market Capitalization: Approximately $4.63 billion.
  • Price-to-Earnings (P/E) Ratio: -0.26, indicating a net loss over the trailing twelve months.
  • Dividend Yield: 5.96%. Investing

Despite recent financial challenges, as reflected in its negative P/E ratio, Implats continues to be a major producer in the PGM market, offering a substantial dividend yield to its shareholders.

3. Sibanye Stillwater Limited (SBSW)

Sibanye Stillwater is a diversified mining company with a strong presence in both South Africa and the United States, particularly noted for its operations in Montana.

  • Market Capitalization: Approximately $2.29 billion.
  • Price-to-Earnings (P/E) Ratio: -0.78, indicating a net loss over the trailing twelve months.

The company’s diversification into battery metals aligns with the growing demand for green energy solutions, positioning it well for future growth.

4. Platinum Group Metals Ltd. (PLG)

Platinum Group Metals Ltd. focuses on the exploration and development of platinum and palladium resources, primarily in South Africa.

  • Market Capitalization: Specific market capitalization details are not available from the provided sources.
  • Price-to-Earnings (P/E) Ratio: Specific P/E ratio details are not available from the provided sources.
  • Dividend Information: The company does not currently pay a dividend.

As a development-stage company, Platinum Group Metals Ltd. presents a higher risk but also offers potential for significant returns, especially with its flagship Waterberg Project, which could become one of the largest undeveloped PGM deposits globally. This is an extremely low cap company and should be considered very speculative.

Conclusion

The unique properties and diverse applications of platinum and palladium position them as critical materials in various industries, from automotive to green energy. Companies like Anglo American Platinum, Impala Platinum Holdings, Sibanye Stillwater, and Platinum Group Metals Ltd. offer distinct opportunities for investors looking to capitalize on the potential growth in the PGM sector. As always, potential investors should conduct thorough research and consider their risk tolerance before making investment decisions.

Disclosure: Author didn’t own any of the above at the time the article was written.

The Rise and Fall of Chinese Stocks: What’s Next for Investors in 2025?

by Fred Fuld III

Since October 2024, Chinese stocks have experienced notable volatility, with significant declines followed by periods of recovery. In October, the MSCI China Index approached its peak from the previous year, driven by government interventions and positive reassessments of China’s technological prospects. This resurgence was influenced by developments such as DeepSeek’s advancements in artificial intelligence and the return of Alibaba’s Jack Ma, signaling a potentially more favorable governmental stance toward the private sector. However, the sustainability of this growth remains uncertain, heavily dependent on the government’s regulatory approach. 

Several factors have contributed to the fluctuations in Chinese stock prices since October 2024. Initially, the market rallied due to financial stimulus measures and optimistic evaluations of China’s tech industry. However, this momentum was short-lived, as investors grew concerned over the lack of effective policies from Beijing to stimulate sustainable economic recovery. The absence of additional measures to bolster growth led to sharp declines in stock markets, with the MSCI China Index nearing its October peak before retreating. 

Baidu Inc. (BIDU) is a leading Chinese multinational specializing in internet-related services and artificial intelligence. Often referred to as “China’s Google,” Baidu offers a range of services, including a dominant search engine, cloud computing, and AI-driven solutions.

As of February 24, 2025, Baidu’s stock price stands at $87.87, reflecting a decrease of 3.71% from the previous close. This $24 billion market cap company has a price to earnings ratio of 9.4%. It does not pay a dividend. The company’s performance has been influenced by broader market trends and regulatory developments within China’s tech sector.

JD.com Inc. (JD) is one of China’s largest e-commerce companies, providing a vast online marketplace for consumer electronics, apparel, and more. Known for its efficient logistics network and commitment to authentic products, JD.com has established itself as a trusted platform among Chinese consumers.

As of February 24, 2025, JD.com’s stock price is $39.31, marking a 7.45% decline from the previous close. The company has a market cap of $54 billion and trades at 12.5 times earnings. It pays a dividend yield of 2.27%. The company’s stock performance has been affected by increased competition and concerns over consumer spending amid China’s economic challenges.

PDD Holdings Inc. (PDD), the parent company of Pinduoduo and Temu, has made significant strides in the e-commerce sector by focusing on discounted goods and a unique social shopping experience. Pinduoduo, in particular, has gained popularity through its group-buying model, offering consumers competitive prices.

As of February 24, 2025, PDD Holdings’ stock price is $119.77, experiencing an 8.79% drop from the previous close. PDD has a market cap of $166 billion and a P/E of 11.8. It does not pay a dividend. Despite its innovative approach, PDD faces challenges related to regulatory scrutiny and the sustainability of its aggressive discounting strategies.

In summary, while Chinese stocks have demonstrated periods of growth, their performance since October 2024 has been marked by volatility. Companies like Baidu, JD.com, and PDD Holdings continue to navigate a complex landscape shaped by economic policies, regulatory changes, and market dynamics. Investors should closely monitor these factors when considering potential growth opportunities within China’s stock market.

Disclosure: Author didn’t own any of the above at the time the article was written.

Forget ETFs and Choose CEFs Trading at a Discount to NAV

by Fred Fuld III

A closed-end fund is a type of investment fund that raises a fixed amount of money through an initial public offering (IPO) and then trades on a stock exchange like a regular stock. Unlike mutual funds, which allow investors to buy and sell shares directly from the fund only once a day at the market close, closed-end funds have a limited number of shares that investors buy and sell from each other on the open market, while the stock exchange is open.

Investing in closed-end funds (CEFs) that trade at a discount to their net asset value (NAV) can offer several potential benefits to investors. (The NAV in simple terms is what the value of the fund would be if all the holdings were sold off, any debts paid off, and the resulting amount divided by all the outstanding shares.)

When a CEF’s market price is lower than its NAV, each dollar invested effectively purchases more than a dollar’s worth of assets. This discrepancy can enhance the investor’s yield and provide opportunities for capital appreciation if the discount narrows over time.

Catalysts that can close that gap include:

• An increase in buyers at the market due to anticipated growth potential

• Activist investors trying to take over the fund and liquidate it

• Management converting the fund to a regular mutual fund

However, it’s essential to recognize that discounts can persist, and relying solely on the expectation of narrowing discounts may be risky. Therefore, a comprehensive evaluation of the fund’s fundamentals, management, and market conditions is crucial before investing.

The SRH Total Return Fund Inc. (STEW) is a non-diversified closed-end fund aiming for total return through a value-driven investment approach. Managed by Paralel Advisors LLC, with SRH Advisors, LLC as the sub-adviser, the fund employs a bottom-up strategy to identify quality businesses trading below their intrinsic value. This methodology seeks to uncover investment opportunities poised for attractive long-term returns.

As of February 15, 2025, STEW’s market price is $16.88, a 22% discount to its NAV. This 1.63 billion market cap fund has a trailing distribution rate or 3.4%, which may or may not continue in the future.

The Destra Multi-Alternative Fund (DMA) offers exposure to a diversified portfolio across various asset classes, including equities and fixed income. Managed by Pinhook Capital, LLC, the fund aims to provide growth and income by allocating assets dynamically in response to market conditions.

As of February 15, 2025, DMA’s market price is $8.56, a greater than 24% discount to NAV. The trailing distribution rate is 3.7% . The fund has an extremely low market cap of $76 million.

The Herzfeld Caribbean Basin Fund Inc. (CUBA) focuses on long-term capital appreciation by investing in companies poised to benefit from developments in the Caribbean Basin region. This includes investments in countries such as Cuba, Jamaica, and Mexico, as well as U.S.-based companies with significant operations in these areas.

As of February 15, 2025, CUBA’s market price is $2.42. For investors interested in geographic diversification and exposure to the Caribbean’s economic growth, CUBA presents an opportunity, particularly when trading at a 23% discount to its NAV. The fund has an extremely low market cap of $38 million. The trailing distribution rate is very high and may not continue at that rate in the future,

The GDL Fund (GDL) is a closed-end fund that primarily engages in merger arbitrage strategies, aiming to profit from the successful completion of corporate mergers and acquisitions. This approach involves investing in companies that are acquisition targets, seeking to capture the spread between the market price and the acquisition price.

As of February 15, 2025, GDL’s market price is $8.34. Investors looking for alternative investment strategies with the potential for steady returns may find GDL appealing, especially if it is available at a current 20% discount to its NAV.

In conclusion, investing in closed-end funds trading at a discount to their NAV can offer enhanced yields and potential capital appreciation. However, it’s essential to conduct thorough research and consider each fund’s investment strategy, management quality, and market conditions. Funds like STEW, DMA, CUBA, and GDL provide diverse opportunities across different sectors and strategies, allowing investors to tailor their portfolios to their specific investment goals and risk tolerances.

Disclosure: Author didn’t own any of the above at the time the article was written.

All that Glitters are Gold Mining Stocks

by Fred Fuld III

Gold has long been considered a safe-haven investment, prized for its stability and ability to retain value over time. Unlike fiat currencies, which are subject to inflation and economic fluctuations, gold has consistently served as a store of wealth. This precious metal is not only valuable for its historical significance but also for its wide range of industrial applications. Gold is used in electronics, aerospace, dentistry, and medical technology due to its exceptional conductivity and resistance to corrosion. The demand for gold extends far beyond jewelry and investment, making it a critical component in various industries worldwide.

Investing in gold can take multiple forms, including physical gold (bullion, coins, and jewelry), gold ETFs, and gold mining stocks. Among these options, gold mining stocks present an opportunity for investors to gain exposure to the gold market while benefiting from the growth potential of mining companies. Unlike physical gold, mining stocks offer dividends and the possibility of capital appreciation as companies expand operations and increase production efficiency. Additionally, mining stocks are often leveraged to the price of gold, meaning they tend to outperform during gold bull markets. However, investing in mining companies also comes with risks, including geopolitical concerns, operational challenges, and fluctuations in production costs.

Most of the gold mining stocks have had huge run-ups in the last couple weeks, so in the event of any sell-offs, some of these stocks may be worth considering as an investment.

Several gold mining companies stand out in the industry due to their size, operational success, and global presence. One such company is Gold Fields Ltd (GFI), a South African-based mining firm with operations in Australia, Ghana, Peru, and South Africa. Gold Fields focuses on sustainable mining practices and has a strong commitment to environmental, social, and governance initiatives, making it a preferred choice for responsible investors.

This $17 billion market cap company has a trailing price to earnings ratio of 27.8 and a forward P/E of 9, with earnings per share growth this year of 25%, and 71.4% projected for next year. The company pays a dividend yield of 2.65%.

Another major player in the industry is Barrick Gold Corp (GOLD), one of the largest gold mining companies in the world. Barrick Gold has extensive operations across North and South America, Africa, and the Middle East. Known for its strategic acquisitions and commitment to cost-efficient production, Barrick Gold remains a top choice for investors looking to capitalize on the rising demand for gold.

The stock,, with a $32 billion market cap, has a trailing P/E ratio of 15 and a forward P/E of 11, with earnings per share growth this year of 24%, and 7% projected for next year. The company pays a dividend yield of 2.27%.

Harmony Gold Mining Co Ltd (HMY) is another key gold producer with significant operations in South Africa and Papua New Guinea. Harmony Gold is well-regarded for its expertise in deep-level mining and its efforts to optimize its operations through technological advancements. The company is focused on increasing its gold output while managing costs effectively, making it a compelling investment option.

The stock has $7.6 billion market cap, a trailing P/E ratio of 16 and a forward P/E of 7, with earnings per share growth this year of 38%, and 19% projected for next year. The company pays a yield of 1.62%.

Kinross Gold Corp (KGC) is a Canadian-based gold mining company with mines and projects across the Americas, West Africa, and Russia. Kinross is known for its disciplined approach to capital allocation and commitment to maximizing shareholder value. The company has a strong track record of operational efficiency and is continuously seeking new opportunities for growth and expansion.

The stock, with a market cap of $14 billion, has a trailing P/E ratio of 14.8 and a forward P/E of 12, with earnings per share growth this year of 30.2%, however only 3% projected for next year. The company pays a yield of 1.05%.

Lastly, Royal Gold, Inc. (RGLD) operates differently from traditional mining companies, as it focuses on gold royalties and streaming agreements. This business model allows Royal Gold to benefit from gold production without directly managing mining operations. By providing upfront capital to mining companies in exchange for a percentage of their future gold production, Royal Gold maintains a diversified portfolio and generates consistent revenue, making it an attractive investment for those looking for stability in the gold sector.

This $10 billion market cap company has a trailing P/E ratio of 30 and a forward P/E of 22, with earnings per share growth this year of 22.4%, and 8.8% projected for next year. The company pays a yield of 1.16%.

With increasing geopolitical uncertainties and economic instability, gold remains a strong asset for portfolio diversification. Investing in gold mining stocks, particularly in well-established companies such as Gold Fields, Barrick Gold, Harmony Gold, Kinross Gold, and Royal Gold, provides an opportunity to benefit from rising gold prices while leveraging the growth potential of these industry leaders. As demand for gold continues to rise across multiple sectors, these companies are well-positioned to thrive, making gold a promising long-term investment.

Disclosure: Author didn’t own any of the above at the time the article was written.

Do Silver Stocks Have a Silver Lining?

by Fred Fuld III

Silver has been on a run for the last three weeks but has had a selloff today. Also, the silver ETF (SLV) is still below its recent high back in October when it traded at a high of 31.83 and is now around 29.

Silver, often considered a safe-haven asset and a hedge against inflation, has seen a resurgence in popularity among investors. While it may not garner as much attention as gold, silver has its own distinct appeal, driven by its industrial applications, its role in the global economy, and its potential as a store of value. For those looking to diversify their investment portfolio, silver and silver stocks offer a compelling opportunity. In addition to being a physical commodity, silver is traded through a variety of publicly listed companies that mine and produce silver, making it an attractive option for those looking to tap into the precious metals market.

One option is investing in silver coins. Check out the previous article Unveiling the Precious Metal’s Potential in Your Portfolio, which covers how to tell if your coins are real or counterfeit.

The demand for silver is closely tied to both its industrial uses and its status as a precious metal. The industrial sector, including electronics, solar panels, and electric vehicles, increasingly relies on silver for its high conductivity and durability. This growing demand, coupled with the metal’s limited supply and high cost of production, makes silver an intriguing long-term investment. As more industries seek to go green and adopt technologies reliant on silver, the metal’s price could experience upward momentum, making silver stocks an attractive investment vehicle.

Silvercorp Metals (SVM)

Silvercorp Metals (SVM) is a mid-tier silver mining company based in Canada, known for its focus on high-grade silver projects. With operations primarily in China, Silvercorp produces a substantial portion of its revenue from silver, along with some gold and other base metals. The company has several established silver mining properties, including the Ying Mining District in Henan Province, which is one of its flagship assets.

One of the standout features of Silvercorp is its consistent focus on low-cost production and efficient operations. The company’s disciplined approach to cost management has allowed it to weather the volatility often seen in the mining industry. In addition, Silvercorp has a solid balance sheet, with a healthy cash flow that supports both ongoing exploration and capital returns to shareholders. For investors looking to gain exposure to silver mining, Silvercorp presents an attractive option due to its stable financial position and strong operational track record.

The stock has a $705 million market cap, has a trailing price to earnings ratio of 11 and a forward P/E of 7.5. Earnings per share growth this year was up 76.9%, and expected to be up 15.5% next year. The company pays a dividend of 0.93%.

MAG Silver (MAG)

MAG Silver (MAG) is another significant player in the silver mining sector, focusing on high-grade silver deposits in Mexico. The company’s flagship project is the Juanicipio silver project, a joint venture with Fresnillo PLC, one of the world’s largest silver producers. Located in the prolific Fresnillo District, the Juanicipio project is a high-grade, near-term production asset that is expected to deliver significant silver output in the coming years.

What sets MAG Silver apart is its strategic positioning in one of the world’s most lucrative silver mining regions. The company has a strong pipeline of projects and is well-positioned to capitalize on rising silver prices. Investors looking for exposure to silver stocks with high growth potential will find MAG Silver appealing due to its focus on high-grade silver deposits and the robust project development underway at Juanicipio. The company’s strong partnership with Fresnillo also provides an additional layer of security, as it brings both technical expertise and financial strength to the joint venture.

The stock, with a $1.63 billion market cap, has a trailing price to earnings ratio of 22 and a forward P/E of 18. Earnings per share growth this year was 68% and next year is anticipated to be up 9.13%. The company does not pay a dividend.

First Majestic Silver (AG)

First Majestic Silver (AG) is one of the largest and most well-established silver mining companies, with a strong focus on Mexico. The company’s operations are spread across several silver mines, with notable properties like the Santa Elena, San Dimas, and La Encantada mines. First Majestic has a reputation for being a cost-efficient operator with a commitment to environmental sustainability and responsible mining practices.

First Majestic stands out due to its emphasis on growth through acquisition and organic exploration. Over the years, the company has successfully expanded its asset base and increased its production capacity, making it a solid contender in the silver mining space. Its ability to deliver silver production while maintaining a relatively low cost structure makes it an appealing option for investors looking to take advantage of silver’s price movements. First Majestic’s solid production growth potential and management’s ability to execute make it a key stock for investors interested in the silver sector.

First Majestic has a market capitalization of $2.69 billion, and trades at 15.8 times forward earnings. Earnings per share growth next year is anticipated to be up 326%. The company pays a dividend of 0.36%.

Conclusion

Investing in silver and silver stocks presents an intriguing opportunity for those looking to diversify their portfolio, hedge against inflation, or gain exposure to the growing demand for silver in industrial applications. Companies like Silvercorp Metals, MAG Silver, and First Majestic Silver each offer unique investment profiles, with different geographic focuses, production strategies, and growth potentials. By carefully considering the attributes of each, investors can align their portfolios with the silver market’s potential for both short-term price fluctuations and long-term growth.

Disclosure: Author didn’t own any of the above at the time the article was written.