Back in 2011 when gold was selling around today's level, Alamos Gold traded at over $20 a share. Today it's trading at just 8, yet tonight it reported outstanding Q3 results including record cash flow from operations of 33 cents per share (up 62% Y/Y), GAAP EPS of .17 (up 240%)
Alamos reported "adjusted" EPS of .15 per share, up 150% y/y (a big "beat"), hiked its dividend 33% & paid off the remainder ($100M) of its revolving credit line. AGI now has no debt. Better still, its Young-Davidson flagship mine (AGI's biggest producer), was limited in Q3.
Alamos's flagship Young-Davidson (Y/D) mine was severely limited in July as AGI completed a multi-yr expansion that will significantly increase the mine's production & lower its costs. At the midpoint, AGI is forecasting a 42% increase in Y/D's production from Q3.
That means that these terrific numbers reported tonight (record cash flow, big EPS gains) were actually depressed relative to what AGI will be reporting in Q4. In other words, this stock is stupid cheap - even assuming the price of gold doesn't rise from here (not my assumption).
To answer questions about share dilution: Unlike many mining cos.,Alamos is NOT a serial diluter. In fact, AGI's been buying back a significant number of shares. When AGI's stock was over $20 in 2011 AGI earned .51 PER SHARE. The current EPS annualized rate is higher,yet AGI is 8
In Q3 2011,with Alamos's stock over 20, AGI generated a record 32 cents PER SHARE in operating cash flow. This quarter's operating cash flow was higher at a record 33 cents PER SHARE. Q4's cash flow will almost certainly be higher than that(possibly by a lot as explained earlier)
• • •
Missing some Tweet in this thread? You can try to
force a refresh
