"We're buying gold equities ... that are completely bombed out and completely misunderstood, with no analyst coverage," said John Feneck of Feneck Consulting.
John Feneck: Gold Price and Equities Not in Sync, How to Play "Huge Disconnect"youtu.be
The gold price has pulled back since the highs seen earlier this year, but it remains elevated as factors like the Russia/Ukraine war and inflation continue to provide support.
The same can't be said for gold equities, many of which haven't been boosted by the yellow metal's rise.
Speaking to the Investing News Network, John Feneck, portfolio manager and consultant at Feneck Consulting, said while this may be frustrating for investors, in his mind it presents an opportunity to buy in early.
Feneck Consulting has about 45 names in its portfolio at the moment with a focus on mid-, small- and micro-cap stocks; Feneck emphasized that he values active trading over a buy-and-hold approach.
Two companies held are Thunder Mountain Gold (TSXV:THM,OTCQB:THMG) and Idaho Champion Gold Mines (CSE:ITKO,OTCQB:GLDRF). The former, which is a recent buy for Feneck, has gold projects in Idaho and Nevada, while the latter has gold assets in Idaho, as well as cobalt claims in the state.
"There's been a huge disconnect with the gold equities and the price of gold, and that's why we're buying gold equities like the ones I named that are completely bombed out and completely misunderstood, with no analyst coverage," he said, pointing to the importance of getting ahead of the crowd.
Feneck noted that this approach is not what generalist investors and large firms like BlackRock (NYSE:BLK) and Vanguard are doing. "They're waiting for a rally, that's how they work," he explained. "They don't buy something cheaply like we're trying to do — many of them will wait for some type of momentum and then latch onto that.
Beyond gold, Feneck is also interested in names in the silver and copper spaces, mentioning Aftermath Silver (TSXV:AAG,OTCQX:AAGFF), Golden Minerals (TSX:AUMN,NYSEAMERICAN:AUMN), Braveheart Resources (TSXV:BHT,OTCQB:RIINF) and Granite Creek Copper (TSXV:GCX,OTCQB:GCXXF).
Watch the interview above for more of his thoughts on gold juniors and more.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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