Alamos Gold Inc (AGI.TO)

It is an under-appreciated name that fell out of favour with a previous large Canadian acquisition that the market felt they over paid for. He likes the geographic mix between Canada and Mexico. He is watching for further developments.

(Past Top Pick, Sept. 1, 2017, Down 43%) 10% of his portfolio is in gold, which is standard. The Trump tax cut have ballooned the U.S. deficit and potentially spells trouble for America. In a recession, this balance sheet will seriously haunt the U.S. So, you must buy some gold.

Gold is one of the worst investments currently, unless you are lucky to catch the right trend at the right time. The volatility on these holdings is nuts. Gold prices are well off the highs. He would see support near current levels, which if broken could take this below $4.00. A break above $8.00 might attract him as a buyer.

Where is gold going? When gold rises, these companies really move up. Be patient with gold companies and wait before stepping in.

(A Top Pick Sep. 1/17, Down 31%) The golds have not done particularly well. Golds are a hedge against central bank lunacy which we have had a lot of. The tax cut the Americans have been given will have unknown affects on the US.

There is lots of insider buying and it is leveraged to the upside on bullion. The stock could double, or quadruple. There could be a 10% setback at some point also. (Analysts’ target: $11.08).

A lot of these companies are cheap now, so they're at a good entry point. Also, insiders are buying it. Has a $13.50 target. He'd like to own it. Well-managed. Sector will enjoy an upside with the rising price of gold.

A lot of investors owned a company they acquired and so sold. You are getting the acquisition for free. (Analysts’ target: $11.21).

He likes this. It’s trading fairly close to its BV. Something really interesting is going on in the gold market, which not many people have noticed. After gold fell to about $1260, gold bullion has been oozing up under everybody's radar. If gold gets up to $1360 and breaks out, that is a very strong signal that the gold market may very well be turning. Given the depressing state of the US, Europe, Japanese and, increasingly China balance sheets, he thinks the price of gold ought to be moving up. Some of these junior stocks, that are trading fairly close to BV, could be huge beneficiaries.

He does not buy or short gold stocks. From a momentum perspective, it fails poorly. With a trend down it will tend to get more selling until it reaches a floor, which it has not. There is not much cash flow and a small yield. It is a volatile stock.

This is probably a good bet going forward. There’s lots of insider buying. Also, they’ve been working very hard to reduce costs. On a Price to Book basis, it is very cheap. When you buy gold, you are fundamentally making a bet that the monetary authorities are going to be stupid, and that is a really safe bet to make, particularly if we get into a Bear market.

B2GOLD (BTO-T) vs Alamos Gold (AGI-T) He wouldn't buy neither of the two, but if he had to choose he prefers BTO-T. BTO-T is forming more of a symmetrical triangle with the bottom going up and the top going down. You can only buy this kind of stock on a breakout to the upside. Eventually it'll break down one side or the other. AGI-T is in a less favorable trend. The lows are more or less getting lowerish. He would only buy this if it broke out on the upside.

Just closed the Richmont acquisition. Views it as a premier mid-cap name in Canada. There is no debt and they have a bunch of cash on the balance sheet. Generates free cash flow. He calculates their all-in sustaining costs is a little below $850 an ounce. Operates in Canada and Mexico. Likes management and the assets. It’s not unreasonable to have some gold exposure, in case things go sideways. Dividend yield of 3%. (Analysts’ price target is $12.00.)

This has taken a kicking over the last week or so with the Richmont acquisition. Think it was a bit of a surprise that the company had made an acquisition of that size. Its original base was in Mexico, but have now diversified into Canada. Richmont has a great little mine. It is ramping up to lots of exploration upside. Maybe they have overpaid right now and incorporated some of their growth into what they paid. He would rather buy something that is steady and consistent and does what it says it is going to do, without surprising him with any dilution or major acquisitions.

Made a bid to acquire Richmont Mines (RIC-T) which is considered as a good acquisition for them. It will increase their Canadian exposure in a more politically safe environment. It will also increase their production profile and lower overall costs. It is probably a decent holding for gold exposure.