Bull of the Day: Iamgold Corp (IAG)
Your tech-heavy portfolio probably needs a little bit of insurance and with the market bumping up against new highs now is a great time to add it. Iamgold Corporation (IAG) is a Zacks Rank #1 (Strong Buy) and carries a Growth Style Score of “A” which is just what I normally like to see. Let’s take a look at why this is a Zacks Rank #1 (Strong Buy) in today’s Bull of the Day.
Insurance Play
Maybe you have been riding the wave of higher tech stock prices over the last several weeks. Maybe you are seeing the run now take place in biotech names as well. And just maybe all that speculation in the market tells you that an insurance play for about 5% of your portfolio makes sense. This is just that sort of stock!
Description
IAMGOLD Corp is an international gold exploration and mining company based in Canada. It holds a 38% stake in the Sadiola Gold Mine and a 40% stake in the Yatela Gold Mine. Both are located in Mali, West Africa. Measured and indicated resources at Sadiola and Yatela are 5.5 million ounces of gold (including reserves of 5.2 million ounces). Inferred resources are 5.9 million ounces. IAMGOLD is actively exploring highly prospective ground in Africa and South America.
Earnings
The last four earnings reports have seen two beats and two meets. The beats, however, have been huge but most of that is due to the small base.
Estimate Revisions
Estimates for this year are moving in the right direction with the Zacks Consensus Estimate moving from a loss of about a nickel to a loss of two cents. Next year, the Zacks Consensus Estimate shows this company turning the corner into profitability. If we are still in this stock in 1Q18, it should lift considerably as it will be posting positive earnings.
Valuation
Without positive earnings, we do not have a PE ratio to fall back on. Instead, we have to look to the price to book and price to sales to get a better idea of where we stand. The price to book for this gold miner is 1.06x so the value-minded investors have to like that. The price to sales multiple of 2.4x is also nice and low. The key here will be growth and can they deliver more than expected in terms of ounces. That is hard to know, but keep in mind that we are using this stock as a defensive tool as well.
Iamgold Corporation Price and Consensus
Iamgold Corporation Price and Consensus | Iamgold Corporation Quote
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