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Yamana (AUY) Hits New 52-Week High: What's Driving the Stock?

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Shares of Yamana Gold Inc. AUY scaled a fresh 52-week high of $4.10 on Jan 23, before closing the session at $3.95.

The company has a market cap of around $3.8 billion. Average volume of shares traded in the past three months is 16,592.4K.

The stock has surged 53.7% in the past year compared with the industry’s rally of 48%.

What’s Driving Yamana?

Better-than-expected 2019 production and bright prospects are major factors driving the company.

Last week, Yamana announced preliminary production results for the fourth quarter and 2019.

For the fourth quarter, the company produced 256,288 gold equivalent ounces (GEO) that comprises 221,595 ounces of gold and 2.97 million ounces of silver. In 2019, the company produced 1.02 million GEO, which includes 900,339 ounces of gold. The updated preliminary data surpassed the previous guidance of 1.01 million GEO. The projected figure included 899,000 ounces of gold. Total silver production of 10.6 million ounces in 2019 also exceeded the earlier projection of 10 million ounces.

Jacobina and El Penon demonstrated strong performance during the fourth quarter. Jacobina produced 41,774 ounces of gold with an all-time high annual production of 159,499 ounces. The figure also exceeded the revised guidance issued in June 2019. El Penon produced its highest quarterly and yearly production since 2016. Fourth-quarter gold production amounted to 48,131 ounces and the same for 2019 totaled 159,515 ounces. Also, the figures surpassed the company’s prior guidance.   

Moreover, Yamana’s overall production in December 2019 was 87,441 GEO, up more than 5% from the budget for the month.

The company also expects costs to be in line with earlier guidance and adjustments, including around $30 per GEO stemming from the removal of production from Chapada in second-half 2019.

Notably, Yamana will implement its earlier announced 25% increase in dividend payout, effective from first-quarter 2020. This will mark the second hike in annual dividends in the past six months. This will bring its annual dividend to 5 cents per share.

Also, earnings estimate revisions have the greatest impact on stock prices. Earnings estimates for Yamana for the fourth quarter have moved up in the past month. Over this period, the Zacks Consensus Estimate for fourth-quarter earnings increased 33% to 4 cents.

Yamana is scheduled to release its fourth quarter and 2019 results on Feb 13, after the closing bell.

Yamana Gold Inc. Price and Consensus


Yamana Gold Inc. Price and Consensus

Yamana Gold Inc. price-consensus-chart | Yamana Gold Inc. Quote


Zacks Rank & Key Picks

Yamana currently carries a Zacks Rank #3 (Hold).

Few better-ranked stocks in the basic materials space are Daqo New Energy Corp DQ, Royal Gold, Inc RGLD and Bunge Limited (BG - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Daqo New Energy has projected earnings growth rate of 326.3% for 2020. The company’s shares have surged 70.2% in the past year.

Royal Gold has an estimated earnings growth rate of 83.5% for fiscal 2020. Its shares have returned 38.1% in the past year.    

Bunge has an expected earnings growth rate of 30.7% for 2020. The company’s shares have gained 6.1% in the past year.

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