The gold spot price has remained steady at 8-year highs of around US$1,704 per ounce. Furthermore, the combination of a weak Australian dollar and an elevated gold spot price has created very healthy margins for Aussie gold miners.

Given its safe haven and hedging characteristics, could gold shares in the S&P/ASX 200 Index (ASX: XJO) provide investors with both a defensive asset and safe returns?

Let’s take a look at 3 mid to top-tier ASX gold miners.

Saracen Mineral Holdings Limited (ASX: SAR)

Mid-tier producer Saracen has largely been unaffected by COVID-19. Proactive control measures including longer fly-in fly-out rosters, additional charter flights and buses to support social distancing, and reduced capital works have allowed the company to operate in a business as usual manner.

In the company’s March quarter update, it highlighted record quarterly production thanks to its first full quarter contribution from its KCGM acquisition. I believe Saracen is in a strong position moving forward given its 7-year track record of meeting or beating guidance and is currently tracking ahead of FY20 guidance.

With a globally renowned Super Pit acquisition under its belt and a moderate price-to-earnings ratio of 34, Saracen may represent good value at today’s prices.

Northern Star Resources Ltd (ASX: NST)

Northern Star Resources is likewise a growth engine following the joint acquisition of KCGM. Some of its COVID-19 related measures resulted in temporary reductions in production, leading to increases in unit costs in the March quarter. However, Northern Star expects improved performance in the June quarter.

That said, it still experienced quarter-on-quarter improvements in both gold production and costs per ounce. As it stands, the March quarter had an average all-in sustaining cost (AISC) of A$1,590/oz, with the current spot price at the time of writing at A$2,637.5.

If investors feel uneasy buying Saracen which is currently at record all-time highs, Northern Star may be the alternative growth-orientated gold miner to consider. 

Evolution Mining Ltd (ASX: EVN)

Evolution Mining is widely regarded as the lowest cost producer alongside Newcrest Mining Limited (ASX: NCM). In its March quarterly report, it highlighted no material impact from COVID-19, but group gold production had declined 3% quarter on quarter.

The company remains confident that it will meet its FY20 gold production guidance of around 725,000 ounces at an AISC at the top end of guidance of A$990/oz.

Evolution noted that should current spot metal prices be maintained during the June quarter, net cash flow is expected to be $90 million to $95 million higher, but AISC would be negatively impacted by A$20 to $25/oz due to higher royalties and lower by-product credits. 

More reading

• The smartest ASX shares to buy if you have $2,000
• Is $1,000 of A2 Milk shares a good investment?
• How can the ASX 200 soar with rising unemployment?
• ASX 200 down 0.9%: CBA reveals $1.5bn COVID19 provision & gold miners charge higher
• Why CBA, CSR, Fortescue, & Northern Star shares are pushing higher

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post ASX gold shares steady: Can gold provide your portfolio with defensive and safe returns? appeared first on Motley Fool Australia.

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A2 Milk Company Ltd (ASX: A2M) shares have been one of the top ASX 200 performers in 2020. In fact, the Kiwi dairy group’s shares have climbed 27.88% since the start of the year. That in itself sounds pretty impressive, but then you remember how many of A2 Milk’s ASX 200 peers have performed so far this year.

The S&P/ASX 200 Index (ASX: XJO) is down 20.43% since 2 January amid the COVID-19 pandemic and an oil price war between Saudi Arabia and Russia. This makes A2 Milk’s share price growth even more remarkable in the face of a broader market downturn.

So, is there still time to buy into the Kiwi dairy group for a good price today?

Should you invest $1,000 in A2 Milk shares?

It’s easy to see why the group’s shares are rocketing higher. We saw ASX supermarket shares surge as panic buying increased in February and March. However, many supermarket suppliers also benefitted from this increased demand at the checkout.

That drove A2 Milk shares to a new 52-week high of $19.23 per share on 16 April. To some, this could signal that its shares are overvalued right now.

It’s hard to go past the dairy company’s recent success if you’re looking to invest. Of course, past performance is not a reliable indicator of future performance. But at the same time, with A2 Milk’s increasing share price pushing its overall value to $13.3 billion, there’s a lot to like about this company.

Compare that to 5 years ago, when A2 Milk shares were trading at just $0.48 per share. Now, if you didn’t invest in the dairy group in 2015, there’s no point crying over spilled milk! In fact, all of us wish we’d bought A2 Milk in the last 5 years.

Foolish takeaway

I don’t think the current $18.00 per share valuation should put you off buying A2 Milk. Sure, there are challenges facing the dairy industry in Australia and New Zealand. However, A2 Milk has also had success in Asia and is deepening its overseas network, which should see it well placed for continued growth in the years ahead. I still think A2 Milk shares could easily be a top 10 ASX share within the next decade.

More reading

• The smartest ASX shares to buy if you have $2,000
• ASX gold shares steady: Can gold provide your portfolio with defensive and safe returns?
• How can the ASX 200 soar with rising unemployment?
• Safe dividend stocks to buy today for the COVID-19 world
• 2 quality ASX shares to buy for long-term growth

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Is $1,000 of A2 Milk shares a good investment? appeared first on Motley Fool Australia.

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