Kirkland Lake Gold (KL.TO) Buy, Sell or Hold

Kirkland Lake Gold (KL.TO)

49.71

+1.01 (2.07%)

as of Feb 9, 2022, 9:00:00 pm Market Open.

318 watching

BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. At 12x earnings, it is very cheap. A good risk-reward play. The dividend is growing fast and good growth is expected at 17% EPS growth for this year. 1B in cash and a very strong balance sheet. It has better margins than AEM. Unlock Premium - Try 5i Free

BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The sector has been weak and the company is very cheap. The balance sheet is very strong and production is set to increase. There is a lot of flexibility for the company if it decides to make acquisitions. Unlock Premium - Try 5i Free

WAIT

Suffering because of the maladies of the sector as a whole. Good growth. He's underweight gold. Problem for gold is the USD. Rising US dollar is a real headwind for gold. Gold has also suffered from interest in crypto currencies. Exceptional valuation.

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TOP PICK

Stockchase Research Editor: Michael O'Reilly KL just reported record levels for production, revenue, and earnings -- all while avoiding pandemic related delays. It trades 15x earnings, compared to its peers at 23x. They have repurchased over $700 million of its stock and boosted dividends twice last year. The dividend is reaching attractive levels and is backed by a payout ratio of about 20% of cash flow. We would buy this with a stop-loss at $32, looking to achieve an initial target of $56 -- over 25% short term upside potential. Yield 1.71% (Analysts’ price target is $76.83)

COMMENT

The commodity price will be the number one driver. It was a strong performer a year or more ago on their Australian assets. However grades started coming down. The market did not like their acquisition. It has been in the penalty box a little bit. It's coming out of it.

HOLD

Gold mining has been disappointing. He likes KL. Great mine, producers, operators, and cashflow. Detour acquisition raised eyebrows, and so it's underperformed. Stick with it. Lower US dollar means lower gold. Long-term, it will perform well for you.

BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Very cheap and the dividend is growing fast. Growth is expected to be good and it has $800M in cash. The sector has been weak recently. Unlock Premium - Try 5i Free

DON'T BUY

They bought DGC-T and OSK-T mining in the last couple of years. You are at the mercy of the commodity. It depends what your outlook on the gold price is. He thinks we are not there yet and is not looking at gold companies. He looks to other spaces, but this is a good company if you are looking for a gold miner.

BUY ON WEAKNESS

It is an example of a good company to buy and to sit tight on it. One of the ultimate vehicle to catch the wave. Management is doing a good job and it is a bargain right now. One of the best companies in the space.

BUY

He lightened on golds last August, including this one. There was some disappointment with recent Foster results. Suddenly Detour's looking like a decent asset. This company is probably the most prominent growth seniors out there and he would probably take it again.

TOP PICK

Good free cash flow growth. Carries no debt, which is crazy for a gold company. They operate in safe territories. They've been buying back shares. They have a profitable mine in Australia, but will be coming to an end. So, how do they pivot to fill this gap? Super managers. He recently added to his shares. (Analysts’ price target is $77.44)

DON'T BUY

Gold is not a big focus for him. Asset is pretty good. Company is solid. This isn't the seasonal period for gold. Bitcoin is stealing lustre from the gold sector. More stimulus could be another leg to the gold trade. No sustained thesis for putting money in.

BUY

If central banks continue to print money, bodes well for hard assets. Gold is trending higher again, a hedge against inflation. Jury is still out, as we don't have runaway inflation. He isn't saying there will be, but there is a risk. Fed is willing to let inflation run hot. Don't have all your money in gold, but a percentage in gold or the precious metals (miners) does make sense. He owns Kirkland Lake and Pan American Silver. These two are the top miners based on his metrics.

BUY

While US stimulus was happening this year, the mood was to must-buy gold. And so, all good stocks rose. But the vaccine roll-out is happening faster than expected, so that's now pressuring gold. KL stock has fallen back to support levels, so it's okay as long as gold holds at $1,800/ounce. KL is making alot of money. KL is one of his four gold holdings. It's managed well, and is investing it well in mines. If you want to buy gold, this is it.

WAIT

Looks as though it's heading lower. His downside target is $50. When it got there in June, had a nice rebound. Hang on, and add at those levels. In 2021, US deficit is going to be something else, and Fed will have to bail them out. More stimulus is good for gold.

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Kirkland Lake Gold (KL.TO)