Yamana Gold Inc. (YRI.TO)

Trading at about a 30% discount to its BV. The company has been working hard to improve profitability. It needs higher bullion prices to break out and get going. Insider trading on this is very strong. Dividend yield of 0.6%. (Analysts' price target is $4.42.)

Since 1 January, this is one that is "coming out of the blue". His last line is $3.79, so that is a Buy signal.

Has a tremendous amount of insider buying, which is normally a good signal. Has had it on his Watch List for a number of years. Doesn’t see buying it now, but it is certainly in the realm of contrarian plays.

It has been one of the weakest golds on the TSX. We reached the end of the period of seasonal strength. It is on a distinct downward trend. We are heading down to support. Look at it in late December.

Has been a disappointing performer and selling at a discount. There was a lot of worry amongst investors and some analysts about the balance sheet because of their building of the new mine Serra Morro, which is now 90% complete, and will increase their cash flow 20%, if not 30% when it is in full production. People are worried it might breach their debt covenants, resulting in an equity issue, but he heard they had hedged 60% of next year’s gold production, and 70% of copper production, at prices above what they had budgeted for. In addition, Serra Morro will see them increase their silver production by about 40%. Dividend yield of 0.8%. (Analysts’ price target is $3.50.)

Trading cheaper than its peers. Has a good, low cost structure for its gold, but more leveraged than desired. Feels the street is looking for better consistency of generating free cash flow. Thinks the Brazilian assets that went into Brio was a bit of a difficult process to get off the books, and they still own shares of Brio and will slowly drift that out into the market. Feels there is an elevated level of execution risks. Have done a good job of trying to hive out some of the higher cost assets and try to refocus around 3 core assets. At this point, it’s a “wait and see” to restore confidence.

They are debt ridden and out of favour. They overpromised and underdelivered. The sellers leave after it goes down. The volatility decreases. He would prefer other golds such as a past pick today.

His system is telling him that the balance sheet of this company is not good. There is something on the balance sheet that has to be written off. He wouldn’t buy any more of this unless it went over $3.81. Expects there will be bad news coming in terms of write offs. There has been an 11% correction in the US$, therefore gold should be going up, but it hasn’t done anything.

There are concerns over the balance sheet as it has quite a bit of debt. They spun off a few mines into a new vehicle called Brio Gold, and got some cash in the door from that. Operationally, it has been an under performer for such a long period of time, and the stock has really tracked that. There are better places to be in gold. He is Short this against some of his Long positions. (See Top Picks.)

This has been doing some interesting things lately. They recently participated in a gold offering and lowered their interest in that from about 80% down to about 55%. That helped address some of their balance sheet issues. They have some growth going forward that looks promising. The real thing is going to be the execution they have at Serra Morro. Depending on how well that execution occurs, will really tell how well the stock performs within the environment.

Like all gold companies, it is not doing great at the moment, but valuations look really good. All gold companies look very similar.

In today’s environment, with low interest rates and low inflation, it is a good environment for a lot of gold companies. They have begun to clean up their act in being more cautious in terms of development of new projects. Overall, a lot of the gold companies are in much better shape than they were 5 years ago. He prefers others. (See Top Picks.)

Gold tends not to do well at this time of year. Also, gold stocks tend not to do well. This has broken its downtrend which started in mid-2016, and that is good. Chart shows it is basing out, which is a positive sign. A little channel is developing, and at about $3.25 would be the point of support. He wouldn’t be a fan of jumping into this right now, based upon seasonal trends.

This has a long road ahead of it. There is a lot of debt on their balance sheet. They tried to spin out a subsidiary, which raised a fraction of what they thought it would. Not a favourite he would look for in this market.

This has been lagging some peers lately. Their last report showed that their all-in sustaining costs were relatively high at around $930. Thinks there were some setbacks in 1 or 2 projects. However, overall this is a fairly good company, and relative to the others, it looks fairly inexpensive. There is going to be a fair amount of CapX going forward. Over the next year, this is kind of an unknown, but if looking at it for the long-term, they’ll probably be alright.