In recent days I’ve detailed why I think big dividend payer Polymetal International could be a brilliant buy for 2020.
I explained how the big issues facing the global economy threaten to spill into next year and how this could carry gold values — and with it the share prices of bullion miner Polymetal — to the stars. The yellow metal’s just stormed through $1,500 per ounce, opening the road for more meteoric gains for the remainder of 2019 and possibly into next year too.
But the FTSE 250 firm isn’t the only specialist in safe-haven assets that could thrive. Take Hochschild Mining (LSE: HOC), for example, a major silver producer which has also recorded monster share price gains in 2019 (up 41% in the year to date).
Should you invest £1,000 in Games Workshop right now?
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It could be argued, in fact, that there’s more scope for silver — and thus silver-exposed stocks — to rise than gold in the months ahead. When I covered Hochschild last month I mentioned how the gold:silver ratio was sitting at multi-decade highs, and while it’s come back a bit, the amount of silver it takes to buy an ounce of the yellow metal remains just off those peaks.
A sterling selection
Recent data certainly suggests that silver is starting to pay catch-up. According to UBS, inflows into silver-backed exchange-traded funds have rocketed in recent weeks, thanks in part to bulging demand from Chinese investors. As a consequence, total global holdings in these instruments sits at record highs north of 700m ounces.
In addition to bubbly metal prices, the brilliant progress that Hochschild’s been making on the production front also gives reason to be optimistic for the year ahead. Latest production data showed the digger hauled 19.9m silver equivalent ounces out of the ground between January and June, the second-best six months of attributable production in the company’s history.
Despite those brilliant silver prices and strong operational data, however, Hochschild still looks unbelievably cheap in my opinion. Right now it trades on a price-to-earnings growth (PEG) reading below the bargain-basement benchmark of 1 times (at 0.3 times, to be exact) thanks to predictions that earnings will double in 2019. And this leaves plenty of scope for its share price to keep charging.
A model growth stock
Games Workshop Group (LSE: GAW) is another resurgent stock I reckon could thrive in 2020.
Investing in the retail sector can be risky business right now, but Games Workshop is in better shape than most to thrive next year and beyond. You see, the retailer of fantasy games sources 75% of all profits from outside the UK, providing it with some considerable protection from shocking deterioration on the high street. And its position on the global stage promises to get bigger and bigger as it embarks on ambitious international expansion.
Not that the business is anywhere near exposed to the trying conditions as much of the broader retail segment. Its products are so niche and command such a dedicated fanbase that it can expect sales to keep rising whatever the weather (sales in its stores alone rose 2% in the year to June 2019 despite some closures, recent data showed).
Games Workshop has a long record of consistent annual profits growth and is showing no signs of stuttering yet. The stock’s risen 53% in value so far in 2019 and it’d take a braver man than me to bet against more chunky increases in 2020.
