It’s been interesting to see gold values retreat away from $1,300 per ounce in recent sessions, the safe-haven metal last dealing around $30 lower from this psychologically-critical level.
Hochschild Mining (LSE: HOC) is one company that has seen its share price retreat in response to this fall, a drop that’s been driven primarily by a pick-up in the US dollar (a development which of course makes the greenback-denominated commodity more expensive to buy).
But as I’ve explained before, there remains plenty of geopolitical and macroeconomic uncertainty out there that could play havoc with risk appetite and supercharge gold demand again. It’s the reason why UBS for one is predicting bullion prices will charge through the $1,400 per ounce milestone within the next 12 months.
Current forecasts suggest Hochschild will deliver earnings rises of 63% and 36% in 2019 and 2020, respectively, figures which leave it dealing on a forward PEG reading of just 0.5 (comfortably below the accepted bargain watermark of 1). Such a low valuation makes the digger a brilliant buy today, and particularly given the prospect of a fresh metal price surge.
10%-plus dividend yields
A dirt-cheap price also makes Bovis Homes (LSE: BVS) a great buy today. Right now it carries a prospective P/E multiple below the widely-regarded bargain benchmark of 10 times, at 9.2 times.
The housebuilder has seen its share price retrace 16% from the 2019 peaks hit in early March, reflecting growing market fears over the Brexit process and how this will impact property prices in the near term and beyond. Yet all the evidence from Bovis and its peers suggest the market remains as robust as ever.
Just last week, chief executive of the FTSE 250 firm Greg Fitzgerald lauded “[the] strong period of trading” since the start of the year, a timeframe in which the average private sales rate per site boomed 17% year-on-year to 0.61 and the company continued to report a “strong forward sales position.”
It’s no wonder that City analysts expect the firm to keep increasing profits through the next couple of years at least, helped by Bovis’s drive to boost build rates and the steps it’s taking to reduce margins too.
A final sweetener. Right now the company sports gigantic dividend yields of 10.3% and 10.7% for 2019 and 2020, respectively.
Value + dividends
Bakkavor Group’s (LSE: BAKK) share price may have remained unmoved since I last covered it at the end of April, but trading at the firm has been solid enough despite the persistence of poor shopper confidence and inflationary stresses in the UK.
News last week that the fresh food producer’s trading has been in line with expectations since the start of the year may not be enough to merit fireworks. But it’s further sign the company is still showing green shoots of recovery.
City analysts still expect the business to recover from an earnings dip this year by bouncing back into growth in 2020, reflecting the huge investment Bakkavor’s making in bright international marketplaces (US and China) and the massive investment it’s making elsewhere to improve its food ranges. Just this month, it purchased Blueberry Foods to bolster its desserts portfolio.
As I type, Bakkavor trades on a forward P/E ratio of 8.9 times and carries big dividend yields of 4.6% for this year, and 5% for next year too. These factors make it worthy of serious attention, in my opinion.
