A-Mark Precious Metals: Buy The Dip With Gold At All-Time High

seekingalpha03-24

A-Mark results have been pressured by lower market premiums for gold and silver physical.The company continues to consolidate market share with an outlook supported by overall solid fundamentals.We ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2421310019?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/827964208/image_827964208.jpg","is_english":true,"pubTime":"2024-03-24 12:57","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2421310019","market":"sh","top_or_hot":-1,"title":"A-Mark Precious Metals: Buy The Dip With Gold At All-Time High","media":"seekingalpha","content":"<div>\n<p>A-Mark results have been pressured by lower market premiums for gold and silver physical.The company continues to consolidate market share with an outlook supported by overall solid fundamentals.We ...</p>\n\n<a href=\"https://seekingalpha.com/article/4680111-a-mark-precious-metals-buy-the-dip-with-gold-at-all-time-high\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>A-Mark Precious Metals: Buy The Dip With Gold At All-Time High</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nA-Mark Precious Metals: Buy The Dip With Gold At All-Time High\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-03-24 12:57 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4680111-a-mark-precious-metals-buy-the-dip-with-gold-at-all-time-high><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>A-Mark results have been pressured by lower market premiums for gold and silver physical.The company continues to consolidate market share with an outlook supported by overall solid fundamentals.We ...</p>\n\n<a href=\"https://seekingalpha.com/article/4680111-a-mark-precious-metals-buy-the-dip-with-gold-at-all-time-high\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4164","symbol_name":"特殊金融服务","start_time":0,"source_url":"https://seekingalpha.com/article/4680111-a-mark-precious-metals-buy-the-dip-with-gold-at-all-time-high","article_id":"2421310019","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/827964208/image_827964208.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2421310019","pubTimestamp":1711256233,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"A-Mark results have been pressured by lower market premiums for gold and silver physical.The company continues to consolidate market share with an outlook supported by overall solid fundamentals.We ar","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4164":"特殊金融服务","AMRK":"A-Mark Precious Metals Inc"},"translate_title":"A标志贵金属：以黄金创历史新高买入","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AMRK":1},"content_text":"A-Mark results have been pressured by lower market premiums for gold and silver physical.The company continues to consolidate market share with an outlook supported by overall solid fundamentals.We are bullish on the stock and expect earnings to benefit as higher gold and silver prices drive a resurgence of demand for bullion and coins.   jansucko A-Mark Precious Metals, Inc. (NASDAQ:AMRK) has likely frustrated investors with shares stuck in a relatively tight range since its pandemic-era breakout. Count us in that group as we last covered the stock early last year taking a bullish view on the company recognized as the leader in precious metals services. Indeed, even with the price of gold climbing toward the $2,200/oz milestone, ARMK has lagged amid a string of disappointing operating and financial trends. Part of the challenge considers low premiums for mint and bullion products against softer demand. Still, we believe the current weakness represents a buying opportunity. A-Mark has consolidated its market share in the key direct-to-consumer segment which we believe could drive a resurgence of growth in the next stage of the precious metals bull market. We may have already seen the bottom for earnings with an improving outlook supported by solid fundamentals. Data by YCharts AMRK Financials Recap AMRK last reported its fiscal 2024 Q2 results in February with GAAP EPS of $0.57, missing estimates by $0.22. Revenue of $2.1 billion climbed by 6.7% year-over-year but was also under expectations. source: company IR The big story here is the shift in market premiums for gold and silver that have narrowed significantly compared to the previous years defined by industry supply chain constraints. That dynamic is reflected in the gross margin of just 2.2% in the quarter, down from 3.3% in the quarter last year. For the first six months of the fiscal year, adjusted EBITDA is down by -50%, This was a point management covered during the earnings conference call:  Premiums on fabricated silver products in particular continue to be weaker than we have seen historically over the last 12 months. There currently is plenty of silver supply in the marketplace and that's affecting the premium that people are willing to pay for the product. So we have been competing, keeping our market share, but we have had to adjust our premiums down both at a wholesale and a retail level.  Even as the volume of gold and silver ounces sold at wholesale is down from peak levels, the trends have some strong points. The number of wholesale tickets is marginally higher suggesting industry activity levels remain robust. Also, while the pace of new customer growth has slowed, the number of active customers on the retail side is up 29% y/y. Management is optimistic that the company is well-positioned for a rebound in the business going forward. One of the steps being taken is adding inventory at \"opportunistic\" prices, essentially taking the other side of the spread. The company has also moved forward with acquisitions as a key part of its growth strategy. In February a deal was announced to buy \"LPM Group Limited\", marking the company's entry into the Asian market, as one of the largest dealers in the region. A-Mark has also acquired the \"Gold.com\" domain name adding to its online presence of high-profile digital assets. source: company IR What's Next For AMRK? Our interpretation of the current weakness A-Mark Precious Metals has faced considers that while \"fabricated\" gold and silver are investments, there is also a discretionary component on the consumer side. Simply put, the combination of high inflation in recent years and elevated interest rates have likely pushed back the capacity for a portion of potential customers to make regular or larger purchases. That would explain the lower volumes and tick lower in average order value even as the market price of gold and silver have climbed higher over the past year. There is also a thought that this segment of physical precious metals investments is competing with the excitement of the crypto market capturing some of what would be inflows toward gold and silver by retail investors. All that being said, the takeaway here is that the business remains profitable with the latest margin figures and run rate of earnings still above 2020 levels. source: company IR There's a case to be made that the long-term outlook for A-Mark today is stronger than ever with its expanded global footprint and also thinking about the current momentum in precious metals prices. We mentioned gold recently breached the $2,200/oz an ounce level for the first time in history. It's likely the current fiscal Q3 results will reflect a boost in investor demand as a tailwind for stronger earnings. The bullish case for AMRK as we see it is that the current rally in gold in silver takes another leg higher, bringing back memories of the coinage frenzy seen in past cycles that would push the premiums that are critical to the A-Mark business higher. We're not there yet, but we believe the market is going in that direction. From a high-level perspective, factors such as U.S. Fed policy apparently comfortable with a structurally higher level of inflation while pointing to interest rate cuts down the line are a good backdrop for precious metals. We believe the market also captures a layer of ongoing geopolitical risks and macro uncertainties that are also supportive of higher prices. source: finviz From the stock price chart, the good news is that shares are well above lows from late 2023, and above an area of technical support we see around $25.00. Holding these recent gains can open the door to start clawing back some of the 2023 losses. Seeking Alpha Final Thoughts We rate AMRK as a buy with a price target for the year ahead at $40.00, implying an 8x multiple on the current consensus fiscal 2025 EPS of $5.14. As we see it, forecasts for earnings have the potential to be revised significantly higher over the next several quarters if gold and silver physical premiums expand. Shares will remain sensitive to the shifting sentiment which should work in its favor assuming the rally in gold and silver continues. In terms of risk, a reversal of the current strength in precious metals would undermine a bullish outlook. By this measure, it will be important for gold to hold the $2,000/oz level as an important benchmark for the segment. Precious metals and ARMK stock would be exposed to a broader deterioration of global macro conditions if it leads to a lack of market liquidity or systemic credit event if there are contagion effects.  Monitoring points for AMRK through 2024 include the gross margin and trends in adjusted EBITDA.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2421310019"}