I haven't written about EQX before. But my quick thoughts on why I added it:
- In general, the Sleepy Portfolios are a factor portfolios looking for dividends/buybacks, sustainable growth, and some valuation/momentum. Of course, EQX doesn't fall into any of these because I "overrode" the model on this one.
So why EQX?
- In general, I've been looking to add some more gold miners. They've lagged the rise in gold. And the fall in oil prices will further lift their earnings.
- I've been kicking the tires on the gold miners for the last couple of weeks trying to find some that don't have much non-NA exposure (Global Portfolio doesn't have that luxury), relatively cheap (I'm a value investor at heart and can't help myself) and that's already had the bad stuff happen to it (it's mining, there's always bad stuff happening).
- EQX fits the mold because it's really cheap (albeit for understandable reasons). Has some LATAM exposure but no Africa or Asia exposure.
- Balance sheet is in good shape (all things considered).
- Greenstone mine is now online and ramping which should be a big tailwind for the company.
- Los Filos has already shut down due to the expiration of the land access agreement. But maybe they can sort it out at some point, which would be a positive catalyst.
- The vote on Calibre Mining acquisition is coming up, and I think it should go through (although there are some doubts given the merger arb spread). The combination gives the company 2 great mines in Greenstone and Valentine to anchor the company going forward.
- Once the vote is done and with Greenstone is up and running, I'm hoping they'll either start paying a dividend or repurchasing shares within the next 6-12 months.
Hi Jonatan. Have you written about EQX before, or could you point towards a note that influenced your decision. tx
Hi,
I haven't written about EQX before. But my quick thoughts on why I added it:
- In general, the Sleepy Portfolios are a factor portfolios looking for dividends/buybacks, sustainable growth, and some valuation/momentum. Of course, EQX doesn't fall into any of these because I "overrode" the model on this one.
So why EQX?
- In general, I've been looking to add some more gold miners. They've lagged the rise in gold. And the fall in oil prices will further lift their earnings.
- I've been kicking the tires on the gold miners for the last couple of weeks trying to find some that don't have much non-NA exposure (Global Portfolio doesn't have that luxury), relatively cheap (I'm a value investor at heart and can't help myself) and that's already had the bad stuff happen to it (it's mining, there's always bad stuff happening).
- EQX fits the mold because it's really cheap (albeit for understandable reasons). Has some LATAM exposure but no Africa or Asia exposure.
- Balance sheet is in good shape (all things considered).
- Greenstone mine is now online and ramping which should be a big tailwind for the company.
- Los Filos has already shut down due to the expiration of the land access agreement. But maybe they can sort it out at some point, which would be a positive catalyst.
- The vote on Calibre Mining acquisition is coming up, and I think it should go through (although there are some doubts given the merger arb spread). The combination gives the company 2 great mines in Greenstone and Valentine to anchor the company going forward.
- Once the vote is done and with Greenstone is up and running, I'm hoping they'll either start paying a dividend or repurchasing shares within the next 6-12 months.