Opinions
Alice Tsang
Sandstorm Gold Ltd.
SSL-T
SELL
Sep 13, 2013
$5.710
Stock price when the opinion was issued
Mining
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BUY
The analysts are very slow to raising their earnings forecasts with the price of gold. The rebound in earnings in some of these companies will be really something. He likes the producers as opposed to the commodity. Producers give you leverage due to the fast rising earnings. He likes the Juniors as well as ABX-T.
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PAST TOP PICK
(A Top Pick Nov 20/19, Up 8%) It's lagged the sector, because it's a royalty company. You need to hold producers and royalties in a portfolio. With royalties, you expect more asset growth in the value of these assets. These companies help finish financing and building a mine for a producer. Once that mine is running, the royalty takes a cash flow off the top that the royalty company hands to shareholders, plus the value of the resource/metal. As that value rises, so will the cash flow. SSL continues to buyback shares, have a lot of cash flow, and are great value at current prices. He has a $13 target and it's a hold.
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TOP PICK
Well run company which should experience a sudden and dramatic increase in cash flow. Another example of the sum of the parts is worth more than the whole. Turkish asset will soon generate cash and their Turkish partners are high quality. 9 Buys, 3 Holds, 0 Sells. (Analysts’ price target is $12.25)
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BUY
He recently upgraded to Buy. He'd been concerned about capital allocation strategy, mainly doing equity financing to buy back shares at high prices. These concerns have largely passed. Cashflow from Turkish operations will begin to come through and have a potentially transforming effect. Malaise has passed, it's back in business.
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With the uncertainty of the gold space, she would tend to gravitate towards higher-quality names such as Franco-Nevada (FNV-T). The last couple of deals they have done have caused some investors to step back.