This Top Gold Stock Could Be The Most Undervalued On The TSX
Written by Chris MacDonald at The Motley Fool Canada
Offers exist in all markets. However, finding undervalued stocks in a hyper-bull market is becoming increasingly difficult. Indeed, investors in sectors such as precious metals today find it difficult to find a gold stock with valuable characteristics.
However, the good news is that the TSX has some winners in this regard. Among my favorites right now is Kirkland Lake Gold (TSX: KL) (NYSE: KL). Indeed, it is a title on which I beat the table for some time. However, the valuation of this company now looks more attractive than I have seen in some time.
Here’s why I think now might be a great time to stock up on TSX gold stocks.
Now is the perfect time to consider this gold stock
Gold miners generally have a bad reputation. Years of mismanagement, misallocation of capital, and rather scheming salaries have destroyed enormous shareholder value. Indeed, investors have reason to be skeptical about putting their money at the service of gold stocks.
However, Kirkland Lake exhibits some of the best traits in all of these areas of concern. It is a company with a world-class management team that has allocated capital extremely well. The company team is paid fairly and has built a portfolio of high-grade mines that are the envy of the industry.
Plus, right now, gold is stabilizing at levels many investors didn’t think possible years ago. The recent rise in gold has been the result of various macroeconomic factors that have persisted for some time. For those who believe this ultra-flexible monetary policy environment will continue, Kirkland Lake is an excellent gold security to buy to gain exposure to this trend.
I am of the opinion that gold has a lot of avenues to shoot higher from here. For those in the same boat, Kirkland Lake is one of the best gold stocks to consider.
At the end of the line
As mentioned, Kirkland Lake’s operations and fundamentals are the envy of many gold miners. It is a cash-bloated company, having no debt and aggressively increasing its dividend. Indeed, this is the kind of gold stocks that have not seen investor bureaus in quite some time.
I think the fact that Kirkland Lake is trading at a valuation multiple of only 13 times earnings is comical. This is such a massive discount from the market, for a company with rock-solid operations and growing cash flow.
Value is hard to find today. However, when investors look carefully, it can be found. Kirkland Lake is a leading gold stock with some of the best characteristics on the market right now.
The post This Top Gold Stock Could Be The Most Undervalued On The TSX appeared first on The Motley Fool Canada.
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Foolish contributor Chris MacDonald has no position in the stocks mentioned in this article.