Q: Wesdome reported recently n the stock was hit pretty hard vs performance of peers today. Their Results didn’t look bad to me. Is it expectations in this sector?
Whilst there looks to be some rotation of money out of the biggest players into mid cap Gold Miners lately Wesdome doesn’t look to be a recipient of that. Any thoughts on this trend n if so do u see opportunity to rotate some Capital outta AEM into any smaller players today n if so your preferences?
Whilst there looks to be some rotation of money out of the biggest players into mid cap Gold Miners lately Wesdome doesn’t look to be a recipient of that. Any thoughts on this trend n if so do u see opportunity to rotate some Capital outta AEM into any smaller players today n if so your preferences?
5i Research Answer:
We are not sure we would suggest a full rotation into smaller companies but certainly some exposure we think is warranted. The sector outlook remains strong. WDO EPS of 52c beat estimates of 51c; revenue of $208.5M matched estimates. EBITDA of $138.4M beat estimates by 7%. WDO raised production guidance to the upper end of its previous range. Revenue rose 63%. Production thouugh did slip 2.8% to 42,781 ounces and this was likely the reason for investor apathy. Production and costs are what the company can control. The stock is still up 23% YTD so is participating at least partially in the rally. It remains very cheap at 7X earnings. We continue to like AEM but smaller ARIS and AAUC also look good.