Is Kirkland Lake Gold Ltd. A Good Stock To Buy Right Now?

Based in Ontario, Kirkland Lake Gold (KL) is one of the oldest gold mining companies engaged in the acquisition, production, and operation of gold properties. The company carries out its mining operations from three high-quality mines namely the Macassa Mine, Detour Lake Mine, and Fosterville Mine that are located in Canada and Australia respectively. 

In the past five years, Kirkland Lake Gold stock has gained more than 500%. However, the stock has taken a beating over the past year and is down by 23.62% since last year and by almost 8% so far this year. That said, it looks like a decent entry at this price point, and the stock looks like it is in recovery mode. 

Bullion, Gold, Bar, Gold Bar, Currency, Wealth, Finance

Image Source: Pixabay

Defense Against Inflation

All metals have some sort of risks attached to them. Gold is no exception. However, the value of gold has always moved up over time. It is considered one of the best hedges against stock markets. This precious metal also has the highest liquidity in the commodity market for which it is often believed that holding the best gold stocks can help build a balanced portfolio. 

Gold stocks also come to the rescue in times of high inflation because fixed income lending securities like bonds often have lower lending rates or lower yields that make them incapable of outpacing the rate of market inflation. Moreover, to counterbalance the effects of the pandemic the Federal Reserve has injected more than $8 trillion into the economy and the excess amount of printed money will add fuel to the market pricing of gold, and the price of this precious metal might move up over the next few years.

Kirkland Lake Gold has got mining rights in Detour lake which is one of the world’s largest open-pit gold deposits having huge growth potential. The company had produced 1,369,652 ounces of gold in 2020 and is expected to produce 1,300,000 to 1,400,000 ounces of gold this year. So, when the price of gold rises, this stock can be one of the biggest beneficiaries owing to its higher production level and also because of the fact that it would be able to charge a greater margin on the increased price level. By holding on to this good quality gold stock at a time when economic growth is going slower and inflation is moving toward its peak, one can even hedge their portfolios against inflation to a large extent.

1 2 3
View single page >> |

Disclaimer: All the information in this article - is published in good faith and for general information purpose only. Hashtag Investing does not make any warranties about the completeness, ...

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.