Latest Stock Buy or Sell? Make More Informed Decisions!
Today, Charles Oliver, HBSc CFA and Barry Schwartz commented about whether TAP-N, VIAB-Q, NP-N, TRP-T, KPT-T, QSR-T, KHC-Q, MDT-N, BRK.A-N, MG-T, XSR-T, CLS-T, BDGI-T, T-N, HR.UN-T, SBUX-Q, DIS-N, WCN-T, NWH.UN-T, ATRL-T, RCI.B-T, POT-T, CSX-Q, AIG-N, BA-T, NA-T, RY-T, SU-T, SLF-T, QCOM-Q, MX-T, OR-T, THO-T, GUY-T, ELD-T, ALO-T, DNA-T, G-T, HL-N, KL-T, DGC-T, K-T, AUQ-T, YRI-T, PG-T, DPM-T, ROXG-T, SWY-T, PAAS-T, IMG-T, AGI-T, MND-T, LSG-T, SMF-T, BTO-T, ARG-T, RIO-T are stocks to buy or sell.
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One of the most impressive underground mines he has ever been to. Have haulage systems, automation, which is incredible. Was skeptical last year they would be able to get tonnage up to their target. They have beaten all their target levels. Doing a really good job. Underground reserve grade is about 2.7 grams per ton, which for an open pit would be spectacular, so this is one of the lower grades for an underground mine.
Very cheap stock. Re-jigged their IRR, which wasn’t good enough. Took away an expensive shaft that they were going to build. Have gotten it to an area where you have a very high IRR, and ultimately the valuation proposition is excellent. 2016 EBITDA target is $115 million, which should double over the next few years.
One of the newest silver mines. Have done a great job of ramping up. Will produce roughly 20 million ounces this year and make lots of free cash flow. With the money, they are going to start to initiate a dividend in Q4. Will be buying back some of their debt. Will also be putting an expansion into the mine, which will be very cheap to increase 20%-25% in throughput.
Management has a big ownership in the company. This is the newest royalty company on the block. They have the Canadiann Malartic, sort of 5% NSR, which will give them $35 million a year. 2% royalty on a number of Cdn assets including Kirkland Lake Camp Have a huge tract of land in Mexico, which he expects they will hive off and keep a royalty on.
Markets. He looks at earnings. Earnings drive stock prices over time. Wouldn’t be surprised to see the market correct 10%, and wouldn’t be surprised to see it go higher 10% from here. Thinks Fair Value on $130 of earnings per share on the S&P 500 next year is somewhere in the $2,000-$2,100 range. A lot more in the next 5 years, so he is more focused on 5 years from now, not 5 minutes. He is hugely bullish on equities. Thinks that corporate managers are doing everything right these days. They are buying back stock and using low debt to make acquisitions, which is accretive to earnings. Canadian population is growing, people are richer, portfolios are growing if you stay invested, our houses are becoming worth more. The same in the US. These are positive things.
He is a patient investor with this stock. Started buying at $7-$8 a share and has only Sold it to trim. He is a big believer in methanol and feels that over time it is going to go into more cars, especially in Asian countries. Feels the possibility of it coming back into North America, where it has been outlawed, as an additive for gasoline. Methanol prices recently have stumbled, but global economies are going to need more methanol. Periodically goes down 5% and you want to get in on those days.
This company has gone through love and hate periods with analysts. For the last couple of years they loved them, but then had some issues with some of their new start up mines. Company just updated their guidance. Pays a nice dividend of 1.8%. Out of favour right now. Stock has been so beaten down that he continues to be a buyer. You can Buy at these levels, chipping away at it, but you have to be patient.