Here’s Why Barrick Gold (GOLD) is a Strong Value Stock – December 4, 2024

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For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium offers many different ways to do both.

The popular research service can help you become a smarter, more confident investor by giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research Reports, and Premium Stock Screens.

It also includes access to the Zacks Style Scores.

What are the Zacks Style Scores?

The Zacks Style Scores, developed alongside the Zacks Rank, are a group of complementary indicators that help investors pick stocks with the best chances to beat the market over the next 30 days.

Each stock is given an alphabetical rating of A, B, C, D or F based on their value, growth and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on. The better the score, the more likely the stock will perform better.

The style scores are divided into four categories:

Value score

Value investors love finding good stocks at good prices, especially before the broader market realizes a stock’s true value. Using ratios such as price-to-earnings ratio, PEG, price/sales, price/cash flow and many other multiples, the Value Style Score identifies the most attractive and discounted stocks.

Growth score

Growth investors are more concerned about a stock’s future prospects and the overall financial health and strength of a company. So the Growth Style Score analyzes characteristics such as expected and historical earnings, sales and cash flow to find stocks that will experience sustainable growth over time.

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Momentum score

Momentum trading is about taking advantage of upward or downward trends in a stock’s price or earnings prospects, and these investors live by the saying “the trend is your friend.” The Momentum Style Score can pinpoint good times to build a position in a stock, using factors such as one-week price changes and the monthly percentage change in earnings estimates.

VGM score

If you want a combination of all three Style Scores, the VGM Score is your friend. It rates each stock based on their combined weighted styles, helping you find the companies with the most attractive value, the best growth forecast and the most promising momentum. It is also one of the best indicators to use with the Zacks Rank.

How Style Scores Work with the Zacks Rankings

The Zacks Rank, a proprietary stock rating model, harnesses the power of earnings estimate revisions, or changes in a company’s earnings outlook, to help investors build a successful portfolio.

Investors can count on the success of the Zacks Rank, with #1 stocks (Strong Buy) delivering an unmatched average annual return of +25.41% since 1988, which is more than double the performance of the S&P 500. But the model rates a large number of stocks, and on any given day there are over 200 companies with a strong Buy ranking, plus another 600 with a #2 (Buy) ranking.

With over 800 top-rated stocks to choose from, it can certainly be overwhelming to choose the stocks that are right for you and your investing journey.

That’s where the style scores come in.

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To maximize your returns, you want to buy stocks with the highest probability of success. This means choosing stocks with a Zacks Rank #1 or #2 that also have a Style Score of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they also have a score of A or B. to guarantee as much upside potential as possible.

Because the scores are developed to work along with the Zacks Rank, the direction of a stock’s earnings estimate revisions should be a key factor when choosing which stocks to buy.

Here’s an example: a stock rated #4 (Sell) or #5 (Strong Sell), even one with Style Scores A and B, still has a downward trend in its earnings outlook and a higher probability that its stock price will to descend.

So the more stocks you own with a #1 or #2 rank and scores of A or B, the better.

Barrick Gold Corporation, based in Toronto, Canada, is one of the largest gold mining companies in the world. The company has many advanced exploration and development projects across five continents.

GOLD is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

It also boasts a Value Style Score of A thanks to attractive valuation metrics such as a price-to-earnings ratio of 13.82; value investors should be aware of this.

Two analysts have upgraded their fiscal 2024 earnings estimates in the past 60 days, while the Zacks Consensus Estimate rose $0 to $1.27 per share. GOLD also boasts an average earnings surprise of 16.1%.

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With a solid Zacks Rank and top Value and VGM Style scores, GOLD should be on investors’ shortlist.



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