Kinross Gold (K-T) — Stockchase (2024)

Mar 8, 2024, 9:00 pm

Consensus

Mixed

Valuation

Fair Value

Similar

Barrick Gold, ABX-T

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Pulled back recently.
Has sold shares, but looking with current share price.
Wait a little before buying.
Expects gold to go up the next few years.

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Late-December to mid-February is gold seasonality. Kinross has corrected with the sector, but it can do well. Let it run and see if it performs well. If not, then exit.

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Has initiated a position in the company. Company focusing on core business model. Strength in US Dollar putting pressure on gold (expect this won't last). Larger institutions recently buying shares in the company.

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Will the price ever recover? If gold recovers, then it will. Some issues to work through. He prefers the bigger gold stocks at the beginning of the cycle, such as AEM, ABX, and NGT. Those ones will move first. You can then drop down to the intermediates as the cycle matures.

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The gold trade is comparatively better, but the last year and a half has not been good. It is range bound. Recent highs won't be seen for a while. The competition from crypto as an alternative inflationary hedge compared to gold has pulled a lot of money out of the sector. Thinks it will come back to the sector. Not long on this name but is in the sector.

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Good company with great upside and leverage. $11 target. Great for older clients who want just one company in the sector, and wait for better gold and silver prices. Yield is 2.19%. (Analysts’ price target is $12.28)

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He prefers the royalty companies, as you divorce yourself from the risk of cost overruns, strikes, rockslides, etc. Particularly troublesome asset in Mauratania, due to government intervention.

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Barrick Gold? He prefers Kirkland Lake and Agnico Eagle among the big producers, because they have better leverage and are streamlined. He always puts Barrick and Kinross in the same category. Kinross buys assets at low prices, but he'd rather buy the companies they buy than Kinross itself. (The one positive with Barrick is Warren Buffet coming on board; big-value investors will buy Barrick and won't bother researching the mid-tiered players.) That said, he expects a better-levered move from KL and AE.

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Golds have been consolidating since July. Own gold if you think there's a disaster waiting out there.

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Bullish on gold. This one will give you exposure to the miners. He's always looked for the best operators, like KL with its clean balance sheet. Watch the USD. If it continues to rally, you'll get a much better opportunity to buy.

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The earnings were good. He just doesn't like these big companies. He has done better with the other producers. He would go with Agnico that presents a better value. (Analysts’ price target is $9.25)

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Not fond of the big boys like this and prefers buying them early to ride the wave when they grow. It's like buying Microsoft in 1995. Companies like Kinross are only now getting into the money, because of their production costs in so many projects. He avoids companies like this.

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Monday it saw a big move up, and it rose above $4.59, but it faces resistance at $5, which is a tight band. If it breaks above $5, it'll be clear sailing to $6. If you own this, you're well set-up. If you don't, look at another gold stock. Gold will rise and so will this stock.

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We are seeing consolidation in the space. This one is at risk of losing relevancy in the space. They completed phase I expansion but it is phase II where you see the production and cash flows expand. The local government has hit the brakes on that going on. It will have to be looking to do M&A after the loss of their growth profile. They don’t have a good record of M&A, however.

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