Gold mining stocks looking like a bargain, Barron’s says

A lot has been going right for gold recently, Andrew Bary writes in this week’s edition of Barron’s. Gold miners should outperform in a gold bull market due to operating leverage-profits ought to rise rapidly as the price of the commodity increases more than costs. That hasn’t been the case, the author notes. But the backdrop for the miners looks favorable, especially with gold potentially headed for $3,000 an ounce. The combined market value of leading miners is under $20B. That includes two well-run Canadian miners, Agnico Eagle Mines (AEM), which is the No. 3 global gold producer, and the higher-growth Alamos Gold (AGI); as well as two “streaming” companies, Franco-Nevada (FNV) and Wheaton Precious Metal (WPM), which contract to buy gold and other metals over multiyear periods from producers but don’t actually mine it.