2 Gold Stocks That Could Shine in August

Agnico Eagle Mines Ltd (USA) (AEM) and Royal Gold, Inc (USA) (RGLD) are among the top August stocks, historically speaking

by Alex Eppstein

Published on Jul 28, 2016 at 12:58 PM
Updated on Jun 24, 2020 at 10:16 AM

Gold stocks have been all the rage in 2016. And, based on a study run by Schaeffer's Senior Quantitative Analyst Rocky White, a pair of gold stocks could continue surging next month. Specifically, Agnico Eagle Mines Ltd (USA) (NYSE:AEM) and Royal Gold, Inc (USA) (NASDAQ:RGLD) are among the top August stocks, based on their performance over the past 10 years.

best august stocks july 28

Diving into the data, AEM has finished nine of the last 10 Augusts higher, with an average single-month gain of 8.3%. A continuation of this trend would help the gold stock hit yet another three-year high. Earlier, the shares topped out at a multi-year peak of $57.14, and were last seen 2.1% higher at $55.79, following a well-received earnings report -- which was met with a price-target hike to $65 from $62 at CIBC.

While AEM has been a long-term outperformer -- more than doubling in value on a year-to-date basis -- the shares could benefit from another round of bullish brokerage notes, should they stay hot into August. After all, seven of the 15 analysts rating the gold stock have designated it a lukewarm "hold."

Turning to RGLD, the stock has traded higher in seven of the past 10 Augusts, and sports an average one-month gain of 6.5%. Like its aforementioned counterpart, RGLD has been hot in 2016, adding 123% to hover near $81.33, and hitting an annual high of $83.61 earlier this month.

As the stock has trekked northward, options traders have understandably grown bullish. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), RGLD sports a 50-day call/put volume ratio of 5.55 -- just 12 percentage points from an annual high.

For near-term speculators, now appears to be an ideal time to purchase premium on Agnico Eagle Mines Ltd and Royal Gold, Inc options. The gold stocks' Schaeffer's Volatility Scorecard (SVS) readings come in at 78 and 100, respectively. In other words, over the past year, the options market has tended to underprice their ability to make big moves.

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