We recently published a list of the 12 Best Canadian Penny Stocks to Buy According to Analysts. In this article, we are going to take a look at where Galiano Gold Inc. (NYSEAMERICAN:GAU) stands against other best Canadian penny stocks to buy according to analysts.
According to a report by the Government of Canada, released on December 16, the country’s economic outlook has been revised upward, as private-sector economists forecast moderate growth of around 2% in the second half of 2025. The report highlights the average of private sector forecasts are used as the basis for economic and fiscal planning in Canada to ensure objectivity and transparency. The Department of Finance surveyed a group of 11 private sector economists in September 2024, who expect the Canadian economy to benefit from robust growth in the US, driven by rising equity markets and increasing confidence among US households and businesses. The economists forecast that the unemployment rate will also stabilize to 6.6% by the end of 2025 compared to 6.9% in the fourth quarter of 2024. The report also states that the government is reducing the federal debt-to-GDP ratio over the medium term. The federal debt-to-GDP ratio in 2023-24 was 42.1% and is forecasted to decline to 41.9% in 2024-25.
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In an interview with BNN Bloomberg on January 3, Gavin Graham, Chief Investment Officer and Portfolio Manager at Spire Wealth Management, discussed the investment landscape for 2025, particularly focusing on Canadian stocks. Graham acknowledged that Canada has been a market leader in cutting interest rates which provides them a much better position than their U.S. counterparts, specifically in sectors such as pipelines, utilities, REITs, telecom, and financials, which are interest-rate sensitive industries.
In the energy sector, Graham expressed a preference for natural gas companies which have performed well due to low cost structure and the potential for increased demand due to the anticipation of colder weather in the US. Despite the local weather-related volatility in North America, he sees a positive outlook for the sector due to the impact of geopolitical events, such as Ukraine ending its gas imports from Russia, which could further influence natural gas prices.
Graham also recommended that investors allocate 5 to 10% of their portfolios to gold, citing the robust performance of gold miners. He noted that while gold itself was up 27% last year, gold miners have underperformed relative to the metal and suggests that major gold miners have the potential to outperform. Gold mining stocks, being a leveraged play on the price of gold, could see significant gains if the gold price continues to rise and can offer attractive dividend yields and a hedge against economic uncertainty.
Canada’s economic outlook for 2025 appears optimistic, with moderate growth expectations, a stabilizing unemployment rate, and a declining interest rate along with the favourable federal debt-to-GDP ratio. Investors seeking diversification and high-growth potential should look at opportunities in undervalued sectors within the Canadian market.
An aerial view of Asanko Gold Mine in Ghana, West Africa.
Our Methodology
For this article, we used Finviz and Yahoo stock screeners to find the 30 largest Canadian companies trading under $5 as of January 5. We then sourced the analysts’ average price targets and picked the 12 stocks that had the highest upside potential. We also included their hedge fund sentiment, which was taken from Insider Monkey’s Hedge Fund database of 900 elite hedge funds as of Q3 of 2024. The list is sorted in ascending order of analysts’ average upside potential as of January 5.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Galiano Gold Inc. (NYSEAMERICAN:GAU)
Upside Potential: 253.85%
Stock Price as of January 5: $1.30
Number of Hedge Fund Holders: 7
Galiano Gold Inc. (NYSEAMERICAN:GAU), headquartered in Vancouver, Canada, is a gold production and exploration company that operates and owns 90% of the Asanko Gold Mine located on the Asankrangwa Gold Belt in the Republic of Ghana, West Africa.
Galiano Gold Inc. (NYSEAMERICAN:GAU) is focusing on optimizing its operations at the Asanko Gold Mine. The company has made significant progress in ramping up mining operations at the Abore pit, with a 32% increase in tons mined and a 13% increase in gold production in the third quarter of 2024. The company is also investing in new equipment and technology, including a mobile crushing unit at the Abore pit, which is expected to improve fragmentation and increase haul truckload volumes. Additionally, Galiano Gold Inc. (GAU) is progressing with the construction of a secondary crushing unit, which will enable the company to maintain above-nameplate levels even when processing harder fresh raw material.
Galiano Gold Inc. (NYSEAMERICAN:GAU) is also advancing its exploration pipeline, with drilling focused on the Sky Gold B and Abore North targets. A follow-up drilling program at the Abore North target has been defined and is scheduled to commence in the upcoming months. The company is also updating its global mineral reserves and resources, which will provide a clear picture of the company’s resource base and inform its life of mine plan. The report will be released to the market in early 2025.
Overall, GAU ranks 4th on our list of best Canadian penny stocks to buy according to analysts. While we acknowledge the potential of GAU to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GAU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.