(Photo: Jingming Pan via Unsplash)

The VanEck Vectors Gold Miners Etf GDX has come back to life in recent months after a disappointing performance in the second half of 2020.

On Thursday, Bank of America analyst Michael Jalonen said big gold stocks are currently transitioning to a period of significant production growth after a period focused on investment and capital returns.

Jalonen highlighted the key themes among gold producers that attended Bank of America’s recent Global Metals, Mining & Steel virtual conference.

“The key overarching theme: moving back into the growth phase,” Jalonen said.

The Numbers: Some companies are much better positioned to grow production than others. Among all the gold stocks he covers, Jalonen said Wheaton Precious Metals Corp NYSEWPN is projected to have the highest production growth over the next three years at about 30%. Agnico Eagle Mines Ltd. AEM is a close second at just under 30%, followed by Franco Nevada Corp FNV at around 25%.

Jalonen said strong free cash flow is funding capital allocation priorities for Wheaton. For Agnico Eagle, Jalonen said the company is forging ahead with its proven long-term growth strategy. Franco-Nevada is a great stock for investors looking for a low-cost gold investment, Jalonen added.

Bank of America has a Buy rating and $55 price target for Wheaton, a Buy rating and $80 target for Agnico Eagle, and a Buy rating and $163 target for Franco-Nevada.

Even though Newcrest Mining ADR NCMGY has the lowest gold production growth outlook of the big gold group, Jalonen said the company has potentially hidden copper value.

Benzinga’s Take: Gold prices are up just 9% in the past year, price action which is likely extremely disappointing for many investors given the more than $6 trillion in stimulus spending the U.S. government has performed in that time.

For now, at least, it appears as though cryptocurrencies have taken the wind out of gold’s sails as the preferred inflation hedge among investors.