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6 Reasons that Make Iamgold (IAG) an Attractive Pick Now

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Iamgold 's IAG stock looks promising at the moment. We are positive on the company's prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.

Let's delve deeper into the factors that make this gold miner an attractive investment option.

What's Working in Favor of IAG?

Solid Rank & VGM Score: Iamgold currently has a Zacks Rank #1 (Strong Buy) and a Value Growth Momentum Score ( VGM Score ) of 'A'. Our research shows that stocks with a VGM Score of 'A' or 'B' combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.

An Outperformer: Iamgold has outperformed the Zacks categorized Mining-Gold industry over the past six months. The company's shares have gained around 28% over this period, compared with roughly 2.5% gain recorded by the industry.

Estimates Moving Up: Annual estimates for Iamgold have moved north over the past 60 days, reflecting analysts' confidence on the stock. Over this period, the Zacks Consensus Estimate for 2017 has improved from a loss of 5 cents per share to a loss of 2 cents per share. The Zacks Consensus Estimate for 2018 has also moved up from a loss of 2 cents per share to earnings of 2 cents per share.

Positive Earnings Surprise History: Iamgold topped the Zacks Consensus Estimate in the last reported quarter, recording a positive surprise of 150%. In the trailing four quarters, the company posted an average positive earnings surprise of 141.67%.

Attractive Valuation: Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value mining stocks, Iamgold is currently trading at trailing 12-month EV/EBITDA multiple of 6.00, cheaper compared with the industry average of 20.62.

Growth Drivers: Iamgold remains focused on increasing reserves and preventing depletion of resources. The company also remains committed to cut costs and maintain a strong balance sheet. Its cash and cash equivalents and restricted cash was $1,184.7 million at the end of the last reported quarter.

Iamgold also has a number of promising development projects (including the Boto Gold project in Senegal, the Pitangui project in Brazil and the Siribaya project in Mali) and the company is making a good progress with these projects. The company's joint ventures in South and Central America, West Africa and Canada have undertaken exploration projects, along with targeting soft rock resources near existing mines.

Iamgold has entered into a joint venture with Sumitomo Metal Mining Co., Ltd. with respect to the Cote Gold Project in Ontario with Iamgold owning 70% of the total participating interests in the joint venture while Sumitomo having the remaining 30%. During the development and operational stages, Iamgold will be operator of the project and both parties shall be responsible for funding the proportionate share of expenditures, including sustaining and initial capital expenditures.

Iamgold's established track record as a successful builder and operator in the mining industry will complement Sumitomo's profound expertise in operating and building mines. Further, the deal gives Iamgold access to Japanese suppliers operating in the industry that will complement the existing supplier networks within Ontario.

As both companies have robust business development capabilities, the joint venture will support Iamgold's objective to grow its production pipeline, by seeking opportunities beyond the Cote Gold Project and exploring areas of common interest.

Iamgold Corporation Price and Consensus

Iamgold Corporation Price and Consensus | Iamgold Corporation Quote

Other Stocks to Consider

Other top-ranked companies in the basic materials space include The Chemours Company CC , Stepan Company SCL and Kronos Worldwide, Inc. KRO , all sporting a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.

Chemours has an expected long-term earnings growth of 15.5%.

Stepan has an expected earnings growth of 8.2% for the current year.

Kronos has an expected earnings growth of 354.8% for the current year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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