Looking for London’s best growth stocks to buy? Here are two whose earnings are tipped to take off in the New Year.
Serabi Gold
Last year, a 26% rise in gold prices drove profits at Serabi Gold (LSE:SRB) through the roof. City analysts are expecting another sharp bottom-line rise in 2025 too — a 62% increase in earnings per share is currently tipped.
I’m not surprised at such bullishness give the high levels of economic and political uncertainty persisting in the New Year.
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The World Gold Council (WGC) notes that “gold volatility has continued to reduce since the outcome of the election, but this may change in the run up to President Trump’s inauguration on 20 January, which may reignite investor interest“.
If the last couple of days are any guide, gold could be in for another landmark year (it posted 40 new record highs during the course of 2024).
Comments from the US President-elect on trade tariffs, Greenland, and Canada have pushed bullion prices to multi-week highs around $2,770 an ounce today.
Other factors that could drive gold even higher in 2025 include worsening conflict in Europe and the Middle East, enduring concerns over China’s economy, and interest rate cuts in response to dropping inflation and weak economic conditions.
It’s quite possible that Serabi could miss these growth forecasts. Production issues could strike the company’s Brazilian assets, undermining its output goals. The company is looking to ramp annual production up to 60,000 ounces by 2026.
Gold prices might also reverse if central banks fail to cut interest rates as rapidly as the market hopes, denting profits growth.
But on balance, I think the gold miner can look forward to another year of strong profits growth in 2025. Besides, I believe these dangers are more than reflected in Serabi’s rock-bottom valuation.
Today it trades on an ultra-low price-to-earnings (P/E) ratio of 2.6 times for this year.
Hochschild Mining
A bright outlook for precious metals prices bodes well for Hochschild Mining (LSE:HOC) too.
City brokers think earnings here will rise 54% year on year in 2025. This also leaves it looking dirt cheap at current prices as well.
As well as having a P/E ratio of 5.7 times, the gold and silver producer trades on a price-to-earnings growth (PEG) ratio of 0.1. Any reading below one implies that a share is undervalued.
This FTSE 250 company could allow investors to effectively hedge their bets with precious metals this year.
While gold and silver may continue to rise on continued safe-haven investment, the latter could similarly rise on signs of improving economic momentum that boosts demand for riskier assets. In this scenario, demand for silver — a heavily used material in industrial applications — might rise strongly.
Like Serabi Gold, Hochschild’s production improvements — in this case, at its flagship Inmaculada project in Peru and Mara Rosa asset in Brazil — could also help it deliver further impressive earnings growth this year.
