Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (CAD) | Target 1 (CAD) | Target 2 (CAD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 5 May, 25 | AGI | Buy | CAD 34.12 | CAD 36.05 | CAD 36.28 | 1 day | 6.3% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Alamos Gold Inc. engages in the acquisition, exploration, development, and extraction of precious metals in Canada and Mexico. The company primarily explores for gold deposits. It holds 100% interest in the Young-Davidson mine and Island Gold mine located in the Ontario, Canada; Mulatos mine located in the Sonora, Mexico; and Lynn Lake project situated in the Manitoba, Canada. The company also holds interest in the Quartz Mountain project located in the Oregon United states. Alamos Gold Inc. was founded in 2003 and is based in Toronto, Canada.
Higher Operating Margin: 28.4% in Q1 2025 vs 19.2% of Industry Median
Higher EBITDA Margin: 43.9% in Q1 2025 vs 33.8% of Industry Median
Higher Cash Cycle Days: 118.3 Days in Q1 2025 vs 58.1 Days of Industry Median
Lower ROE: 0.4% in Q1 2025 vs 1.1% of Industry Median
Volatility in the commodity price, Trade Tariffs, Regulatory Risks, Inflationary Pressures, Forex Headwinds, etc.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 34.12 | 32.1 | 36.05 | 36.28 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Elevated sales: In Q1 2025, the company sold 117,583 ounces of gold at an elevated average realized price of USD 2,802 per ounce compared to USD 2,069 per ounce in pcp. This helped the company in generating quarterly revenues of USD 333 mn against USD 277.6 mn in pcp.
Healthy Liquidity: The Company is well positioned to fund its high-return growth projects with strong free cash flow, USD 289.5 million in cash at the end of Q1 2025, and USD 789.5 million in total liquidity. At current gold prices, it expects to maintain solid free cash flow through 2025, with a significant boost expected after completing the Phase 3+ Expansion in 2026, PDA in 2027, and Lynn Lake in 2028.
Upgrading Capacity: Recently the company announced a construction decision for the Lynn Lake project, with initial production anticipated in the first half of 2028. The project is expected to produce an average of 176,000 ounces annually over its first ten years at a first-quartile mine-site AISC. Lynn Lake is projected to boost total consolidated production to around 900,000 ounces per year and contribute to a continued reduction in costs.
Considering the expected valuation upside, favorable gold outlook, consistently healthy operational results, decent cash from operations, upgrading capacity, current trading levels and key business risks, a ‘Buy’ recommendation has been given on the stock at the last closing price of CAD 34.12, as on May 2, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Basic Materials Industry: Gold
| Company | Change (CAD) | Price (CAD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| AGI Alamos Gold Inc |
0.46 1.29% | 36.01 | 30.52 | 16.86 | 8.68 | 2.33 | 6.65 | 13.30 |
| NGT Newmont Goldcorp Corp |
0.13 0.18% | 72.90 | - | 7.79 | 4.20 | 1.73 | 3.37 | 24.37 |
| AEM Agnico Eagle Mines Limited |
2.56 1.63% | 159.31 | 39.71 | 16.75 | 6.98 | 2.06 | 5.48 | 12.87 |
| WPM Wheaton Precious Metals Corp |
2.33 2.02% | 117.77 | 48.51 | 33.33 | 33.62 | 4.07 | 23.68 | 30.92 |
| ABX Barrick Gold Corp |
0.08 0.31% | 26.08 | 17.48 | 9.47 | 3.29 | 1.18 | 2.31 | 4.80 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is May 2, 2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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