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Alamos Gold Inc. Message Board

  • investora2z investora2z Aug 28, 2013 1:03 PM Flag

    An outperformer

    Alamos remains an out-performer compared to several of its peers. Interestingly, it never broke the April lows, and is now 55% above the low made in June. It is more than 65% above the 52 week low made in April. Compared to the 18% rise in gold since June, this is a remarkable performance. Gold is now much more stronger compared to how it was a few weeks ago. It has crossed crucial hurdles which may provide support in case of a correction. Correction is highly likely considering the speed with which it has moved after crossing $1340. The stocks are also due for some correction after such a huge rise. Profit booking will be healthy, provided it does not change the sentiments. Investor interest in mining companies may increase further if gold manages to negotiate a correction. Already there are signs of increased investment. Pershing Gold (PGLC), a development stage company, recently obtained more than $20 million in equity funding which may help it start production in 2014. The positive about Alamos is that it is amongst the lowest cost producers in the industry, and hence may do better fundamentally if the gold prices rise further. The all-in costs were higher in the second quarter as they increased to $861/oz from $764/oz in Q2'12, but for the first six months of 2013, the costs remained flat. This cost is much lower than the industry average. Further, it is a zero debt company with nearly $467 million in cash. The profit margin on a ttm basis is nearly 29%. Several analyst have raised the price target of Alamos recently. The consensus rating for the stock is buy, and the target price is C$17.42. However, the recent rise in the stock has made the valuations a bit high. Now it is trading at around 21 times ttm earnings and the price to sales is in excess of 6. The valuations have to be kept at the back of ones mind.

7.27-0.42(-5.46%)Aug 30 4:01 PMEDT