Precious Metals: Platinum Beats Gold
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 Platinum Group Metals Ltd. 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 New Gold Inc. Report
,
Tanzanian Royalty Exploration
(TRE)
,
Lihir Gold
(LIHR)
,
Golden Star Resources
(GSS) - Get Golden Star Resources Ltd. Report
and
Eldorado Gold
(EGO) - Get Eldorado Gold Corporation 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
TheStreet Recommends
Newmont Mining
(NEM) - Get Newmont Goldcorp Corporation (NEM) 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 Gold Fields Limited Sponsored ADR Report
,
Harmony Gold Mining
(HMY) - Get Harmony Gold Mining Co. Ltd. Sponsored ADR Report
,
Kinross Gold
(KGC) - Get Kinross Gold Corporation Report
and
Yamana Gold
(AUY) - Get Yamana Gold Inc. 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 Coeur Mining, Inc. Report
,
Silver Standard Resources
(SSRI)
,
Hecla Mining
(HL) - Get Hecla Mining Company Report
and
Endeavour Silver
(EXK) - Get Endeavour Silver Corp. 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 Compania de Minas Buenaventura SAA Sponsored ADR Report
,
Mag Silver
(MVG)
and
Pan American Silver
(PAAS) - Get Pan American Silver Corp. Report
, outperformed the index on a risk-adjusted basis by 13.1%, 7.9%, and 2.8%, respectively.
