Back to top
Read MoreHide Full Article

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 - Free Report) 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.  

 

 

The Best & Worst of Zacks

Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market.

See these critical buys and sells free >>




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Iamgold Corporation (IAG) - free report >>


More from Zacks Bull of the Day

You May Like