Q: Is this a gold company to own. I already have Agnico and Torex and have done well recently, but noticed Mr Sprott has been buying more of JAG.
5i Research Answer:
JAG hasn't created much shareholder value in its time, but it is trading at a decent valuation of 8.5X forward earnings and margins have been improving. Free cash flow is slightly negative, but it has a strong balance sheet with minimal debt. It has a beta of 1.4, and we suspect that any large and sustained move up in the price of gold should have a positive impact to JAG.
We would prefer some other high quality gold names over JAG, however, including AEM and KRR.