Precious Metals: Platinum Beats Gold

Platinum and palladium stocks outperformed gold and silver stocks on a risk-adjusted performance basis during the past six months.
Author:
Publish date:

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) - Get Report

outperformed the index by 19.5% on a risk-adjusted basis during the past six-months.

U.S. Gold

(UXG)

,

New Gold

(NGD) - Get Report

,

Tanzanian Royalty Exploration

(TRE)

,

Lihir Gold

(LIHR)

,

Golden Star Resources

(GSS) - Get Report

and

Eldorado Gold

(EGO) - Get Report

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) - Get Report

, 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) - Get Report

,

Harmony Gold Mining

(HMY) - Get Report

,

Kinross Gold

(KGC) - Get Report

and

Yamana Gold

(AUY) - Get Report

, 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) - Get Report

,

Silver Standard Resources

(SSRI)

,

Hecla Mining

(HL) - Get Report

and

Endeavour Silver

(EXK) - Get Report

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) - Get Report

,

Mag Silver

(MVG)

and

Pan American Silver

(PAAS) - Get Report

, outperformed the index on a risk-adjusted basis by 13.1%, 7.9%, and 2.8%, respectively.