Stock markets collapsed on Tuesday due to the recent plunge in oil prices, which was caused by low demand. Most of the futures ended in the red after the week-long rally. Investors hoped that as the coronavirus pandemic was slowing, the markets would found footing soon.
However, the critical condition of North Korea’s dictator on top of the oil price’s downfall made them nervous. Uncertainty of what becomes to North Korea and the possibility of unrest in the region concerns the analysts as well.
Still, there is one niche, which has been steadier so far despite all the turmoil. Gold is guaranteed safe-haven, as it’s not as volatile as other futures or commodities. That’s why the experts recommend investing in gold mining companies if you want to add something to your portfolio.
McEwen Mining specifically is a good choice. This small-cap company generated a gross profit of $9 million in 2019, pulling 174,420 gold equivalent ounces out of the ground. And it is mining both gold and silver in North and South America.
Is McEwen Mining the right choice amidst the coronavirus pandemic?
The company withdrew forward guidance for 2020 production due to the coronavirus uncertainty. Furthermore, McEwen stated last month that it would scale down operations at two major mines, Gold Bar in Nevada and the Black Fox in Canada.
So far, McEwen did not issue new production guidance for the current year. And the firm previously encountered several operational issues in 2019. Despite that, analysts still advise grabbing its shares. According to Heiko Ihle, H. C. Wainwright’s analyst, the problems that McEwen faced in 2020 due to the pandemic are mostly out of its control.
In the light of oil’s downfall, gold and silver remain highly sought-after commodities. Not only does the long-term outlook remain upbeat for McEwen Mining, but the current share price for this stock represents an attractive entry point.
The average price target for this stock is $2.29, which indicates room for an incredible 127% upside for this year. While Ihle lowered the price target from $2 to $1.75, he still sees an impressive 73% upside potential for McEwen.