Yamana Gold Inc (LSE: AUY)

Yamana Gold Inc (LSE: AUY) is engaged in the production of precious metals. The Company has gold and silver production, development stage properties, exploration properties, and land positions throughout the Americas, including Canada, Brazil, Chile, and Argentina.

Investment Rationale – Sell at GBX 475.00

• Listing Cancellation: The listing of Yamana Depositary interests on the premium listing segment of the Official List and trading on LSE will be canceled from 08:00 AM GMT+1 on 3 April 2023.
• Acquisition: On 24 March 2023, the management announced that Pan American, will acquire 100% of the outstanding common shares of Yamana Gold all in exchange for USD 1.0406 in cash from Agnico, 0.1598 of a Pan American share and 0.0376 of an Agnico share for each Yamana share held, the same was approved the shareholders of Yamana Gold.
• Sluggish Profitability Margins: In FY22, the Gross margin of AUY was 56.9% against 61.7% in FY21, and the Operating margin declined to negative 97.3% in the reported period (FY22) as compared to positive 24.2% in the previous period. Also, the net margin turned negative to 77.2% in FY22 versus positive net margin of 4.9% during FY21.
• Industry lagging liquidity Ratios: The group’s quick ratio for FY22 was reported at 1.00x, as compared to the industry median of 1.40x. Further, the AUY’s current ratio slipped to 1.44x for the reported period FY22, against the industry median of 1.44x.

Share Price Chart  

Conclusion

Based on the notional gains, macroeconomic challenges, and price action stance, a "SELL" recommendation on Yamana Gold Inc (LSE: AUY) has been given at the closing market price of GBX 475.00 (as of 24 March 2023).

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 level is 24 March 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.

Disclaimer

References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.

This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332. Kalkine Limited is authorised and regulated by the Financial Conduct Authority under reference number 579414.

The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation.

Kalkine does not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. Kalkine’s non-personalised advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested.

Kalkine Media Limited, an affiliate of Kalkine Limited, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.