Why Shares of Newmont Are Soaring This Week
Key Points
Newmont is a global leader in gold production.
The price of gold hit a record high this week.
Shares of Newmont are trading at a premium to their historical valuation, yet they still look attractive.
- 10 stocks we like better than Newmont ›
It's been a lustrous few days for gold mining leader Newmont (NYSE: NEM). With gold prices continuing to soar, Newmont stock is reaping the benefits.
According to data provided by S&P Global Market Intelligence, shares of Newmont are up 14.8% from the end of trading last Friday through 3:12 p.m. ET on Thursday.
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Gold has never shone as brightly in investors' eyes as it has this week
Soaring to a record high, the price of gold topped $4,310 (as of this writing). Between the escalating trade war that the U.S. seems to be entering with China, a government shutdown, and concerns that the market is headed for a correction, investors have been seeking defensive investments such as gold.
With the strong correlation between the movements in the price of the yellow metal and those of gold stocks, it's little wonder that shares of Newmont, a global leader in gold production, are rising so much.
In 2024, Newmont reported gold production of 6.8 million ounces, and it projects 2025 gold production of 5.9 million ounces.
Is it too late to add some glitter to your portfolio with Newmont stock?
Valued at 12.2 times operating cash flow, shares of Newmont are priced at a premium to their historical valuation of 9.3 times cash from operations. Despite this slightly higher price tag, gold bugs looking to fortify their portfolios with a leading gold stock would be wise to click the buy button on Newmont stock right now. Those looking to mitigate the risk of investing in a single stock, however, have plenty of opportunities for gold exposure with a gold-focused exchange-traded fund.
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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