NEW YORK (TheStreet) -- Our risk-adjusted calculation methodology for precious metals during the past six-months indicates that platinum group metal stocks outperformed gold and silver stocks overall, even though gold stocks gained during the market correction between April 23 and June 7.
Our PGM stock favorites for months, Stillwater Mining (SWC) and North American Palladium (SWC) outperformed the S&P 500 on a risk-adjusted basis by 37.0% and 18.6%, respectively. Another, PGM stock Platinum Group Metals (PLG) outperformed the index by 19.5% on a risk-adjusted basis during the past six-months.
U.S. Gold (UXG), New Gold (NGD), Tanzanian Royalty Exploration (TRE), Lihir Gold (LIHR), Golden Star Resources (GSS) and Eldorado Gold (EGO) were the only gold stocks to dominate or match PGM stocks, overriding the index by 52.9%, 48.2%, 22.0%, 21.6%, 21.5% and 18.5%, respectively, on a risk-adjusted basis.
US Gold, New Gold and Eldorado were upbeat during the S&P 500's recent slide. Tanzanian Royalty's performance can be attributed to its low-beta value of 0.69, which reduces the required return for a given risk.On the other hand, PGM producers, Stillwater Mining, North American Palladium and Platinum Group Metals, have high equity betas of 2.17, 1.81 and 1.29, respectively. These higher-beta values, compared to gold stocks, reduced the risk-adjusted performance of PGM producers. Gold giants Barrick Gold (ABX), Goldcorp (GG) and Newmont Mining (NEM), with respective equity betas of 0.77, 0.82 and 0.88, trounced the S&P 500 on a risk-adjusted basis by 6.3%, 7.8% and 8.5%, respectively. Other gold producers, Gold Fields (GFI), Harmony Gold Mining (HMY), Kinross Gold (KGC) and Yamana Gold (AUY), underperformed the index on a risk-adjusted basis by 1.6%, 4.3%, 4.7% and 10.5%, respectively. The underperformance is more prevalent for silver stocks. Coeur d'Alene Mines (CDE), Silver Standard Resources (SSRI), Hecla Mining (HL) and Endeavour Silver (EXK) outstripped the index by 17.3%, 15.8%, 14.1% and 3.9%, respectively, on a risk-adjusted basis. Our top silver stock pick for months, Silver Wheaton (SLW), was the only silver stock to match PGM stocks, with a risk-adjusted gain of 20.7% over the index. Other silver stocks Compania de Minas (BVN), Mag Silver (MVG) and Pan American Silver (PAAS), outperformed the index on a risk-adjusted basis by 13.1%, 7.9%, and 2.8%, respectively.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV