Randgold: Golden Gains in Africa
04/08/2016 8:00 am EST
Fed Chair Janet Yellen recently testified that she thinks the dollar is starting to show some weakness; that’s bullish for commodities in general, and gold in particular, explains Mark Skousen, editor of Fast Money Alert.
One of my favorite gold stocks is Randgold Resources (GOLD), a conservative exploration and development miner.
The firm is based in Sub-Saharan Africa and operates mines in Mali, Côte d Ivoire, the Congo Senegal. Together they produced 1.2 million ounces of gold last year.
Revenue rose 22.2% to $1 billion and net income hit $189 million. It enjoys a profit margin of 18.6% and has virtually no debt with $214 million in cash.
It has done spectacularly better than its competitors; instead of cutting its dividend, like many mining companies, it raised its dividend this year by 10% to 66 cents per share.
GOLD has a remarkable track record of success in discovering and developing new resources throughout Africa. It now is in search of its next big discovery.
CEO Mark Bristow recently stated, “Randgold is now in a unique position to continue delivering value to all its stakeholders.”
He suggests that the firm’s mines can continue to generate cash flows at gold prices well below the $1,000/oz level.
The stock is selling for 29 times forward earnings, decidedly less than most mining operations.
With the Fed soft on raising rates, and increasing the money supply (M2) at an alarming rate of 9%, precious metals may be due for another move up.
With a rising dividend and virtually no debt, Randgold is an excellent way to play this rally in gold.
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By Mark Skousen, Editor of Fast Money Alert
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