Lucara Diamond Corp (LUC.TO)

Once owned it. The new CEO (a successful woman with a good track record) replaced the former CEO who was burned out. An essential stock to own in the diamond space. He may rebuy it.

He is a founding shareholder, but got nervous of the diamond business and got out. He would own it because it is controlled by the Lundin family.

The diamond business is really, really tough. It is hard to find a mine, and costs billions to develop it. For the sector, this is probably the best company you could buy. It has a nice dividend and a nice cash position. They paid a special dividend last year. There is the potential to find giant diamonds, which they already have. They’ve changed their production profile so that they can find giant diamonds. It is worth owning for the dividend and the special dividends along the way. Dividend yield of 2.1%.

The diamond business is tough. It pays a dividend of 1.6%. Changed their production method to go after some giant stones. The valuation, cash, potential all looks good. Very cheap at 9X earnings and has a ton of cash.

A diamond miner, and it seems like the pipe they are mining right now continues to produce giant diamonds. Thinks they will continue to execute. Has a steady cash flow from mining normal diamonds, and then, every once in a while, they find a monster diamond, which is going to do great things for their cash flow. You can probably expect special dividends occasionally. A little volatile, so you can trade around it.

They have a habit of finding huge outsized diamonds. The diamond market right now is in an oversupply situation, because of the mines in Russia. Doesn’t think that should last too much longer. He would wait for a pullback. Has owned this in the past.

They are the best of the diamond companies around the world when diamond prices and demand are falling. He would also favour a long term approach to diamonds and you could buy it now for a long term hold.

Operated by the Lundine family. This has been a truly outstanding Canadian success story. It mines and markets some of the highest quality diamonds globally. Earnings on a quarterly basis are lumpy, but over the course of a year they earn and distribute a lot of money. Return on cost employed in this mine is spectacular, and it looks like the mine life is pretty good. If you are willing to own, what is in effect a luxury goods market in the face of an economy that you see for the next 2 years, this is a good name to own.