Now You See Me, Now You Don't
They say that the stock market is just one massive scam/cashgrab. They say that investment analysts and investment news websites are more of a cause than an effect of market changes. Sometimes this is true, sometimes it isn't. However, in researching a stock I am interested in (NYSE: IAG), I was treated with something that made me both laugh and be disgusted at the same time.
For the record, I have noted down the content of both articles, in case the website tries to bury the evidence later. You will find below the URLs, titles, authors, and dates of each. Note that both articles are from the same source (fool.ca) and dates within just a few days from each other (so it's not like a different climate or anything). However, the message within each completely contradicts the other! You think one of the 2 authors was paid off? You be the judge!
3 Beaten Up Gold Stocks With the Potential to Double
By Nelson Smith - April 3, 2014
http://www.fool.ca/2014/04/03/3-beaten-up-gold-stocks-with-the-potential-to-double
"IamGold
Shares in IamGold (TSX: IMG)(NYSE: IAG) have been perhaps the worst performing in the sector, shedding more than 80% from its highs.
IamGold’s balance sheet is rock solid. The company has a book value more than three times the value of the stock, is currently sitting on a healthy cash balance, and its long-term debt is less than 15% of total assets. The company is on record saying that its strong financial position will allow it to explore acquisition opportunities, which could be a boon for stock price.
It has diversified operations, with mines in North America, South America, and Africa. It also has a niobium mine in Quebec, which is used mostly in alloys that end up in gas pipelines."
3 More Stocks to Avoid Forever
By Benjamin Sinclair - April 15, 2014
http://www.fool.ca/2014/04/15/3-more-stocks-to-avoid-forever
"3. Iamgold
If gold prices go back to $1,900 per ounce, which is where they were in 2011, perhaps no company will benefit more than Iamgold (TSX: IMG)(NYSE: IAG). This is because the company is one of Canada’s highest cost gold producers. The company doesn’t admit this easily, but the numbers tell the story.
In 2013, the company reported “cash costs” of $801/oz for the year. But all-in sustaining costs at its gold mines were north of $1,200, and that does not include “development/expansion” costs of $485 per ounce of production. Worst of all, Iamgold’s reserves actually decreased during the year, making one wonder whether those expansion costs really should be classified as such.
In fact the company’s free cash flow in 2013 was negative $371 million, in a year when gold prices averaged $1,400. So unless gold prices recover dramatically, Iamgold will continue to bleed cash.
Foolish bottom line
Any of these investments could conceivably turn out really well. If China reaccelerates, Indigo receives a buyout offer, or gold prices spike, these three companies will be fine. But that is not a gamble worth taking. You’re better off staying on the sidelines."
For the record, I have noted down the content of both articles, in case the website tries to bury the evidence later. You will find below the URLs, titles, authors, and dates of each. Note that both articles are from the same source (fool.ca) and dates within just a few days from each other (so it's not like a different climate or anything). However, the message within each completely contradicts the other! You think one of the 2 authors was paid off? You be the judge!
3 Beaten Up Gold Stocks With the Potential to Double
By Nelson Smith - April 3, 2014
http://www.fool.ca/2014/04/03/3-beaten-up-gold-stocks-with-the-potential-to-double
"IamGold
Shares in IamGold (TSX: IMG)(NYSE: IAG) have been perhaps the worst performing in the sector, shedding more than 80% from its highs.
IamGold’s balance sheet is rock solid. The company has a book value more than three times the value of the stock, is currently sitting on a healthy cash balance, and its long-term debt is less than 15% of total assets. The company is on record saying that its strong financial position will allow it to explore acquisition opportunities, which could be a boon for stock price.
It has diversified operations, with mines in North America, South America, and Africa. It also has a niobium mine in Quebec, which is used mostly in alloys that end up in gas pipelines."
3 More Stocks to Avoid Forever
By Benjamin Sinclair - April 15, 2014
http://www.fool.ca/2014/04/15/3-more-stocks-to-avoid-forever
"3. Iamgold
If gold prices go back to $1,900 per ounce, which is where they were in 2011, perhaps no company will benefit more than Iamgold (TSX: IMG)(NYSE: IAG). This is because the company is one of Canada’s highest cost gold producers. The company doesn’t admit this easily, but the numbers tell the story.
In 2013, the company reported “cash costs” of $801/oz for the year. But all-in sustaining costs at its gold mines were north of $1,200, and that does not include “development/expansion” costs of $485 per ounce of production. Worst of all, Iamgold’s reserves actually decreased during the year, making one wonder whether those expansion costs really should be classified as such.
In fact the company’s free cash flow in 2013 was negative $371 million, in a year when gold prices averaged $1,400. So unless gold prices recover dramatically, Iamgold will continue to bleed cash.
Foolish bottom line
Any of these investments could conceivably turn out really well. If China reaccelerates, Indigo receives a buyout offer, or gold prices spike, these three companies will be fine. But that is not a gamble worth taking. You’re better off staying on the sidelines."
posted by The One at 4:36 AM
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