FEBRUARY 22, 2020
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market never was a love song. Often it’s a popping lotto box of bone break. Doing the work don’t mean you’re gonna be loved. Do something people don’t immediately understand and you may be treated like a weekend Elvis.
Kirkland Lake Gold gets it. KL just bought a brighter future and beat the numbers like a gong. Elvis. They just reported again and now may be your moment. When you grow EPS by 104%, and revenue by 51%, over the entire year, you may just be a pulsar.
We’ve also been strapped-up with Alteryx, keepin’ the faith and being paid. We did just talk “Alteryx Again & Again. The Pattern You Can Play.” Now we’re back to report the results–theirs and ours. Did Alteryx remain true to it’s ways? Nonetheless, “The Good Refuse to Go. Kirkland Lake and Alteryx Prove Golden.”
is both a major metro area and home base for Kirkland Lake Gold. KL is fast becoming a stunning star amid a field of also-ran gold miners. Yeah, we just covered them for the first time in our piece “Kicked On.” Yet, they just reported on Thursday. They brought both barrels. Q4 and full year 2019 ripped the doors off. For Q4 KL grew EPS by 76% year-over-year.
Think about it. Do you know many other companies performing so well? People love Uber. UBER won’t touch such numbers for years–if ever. Nor will Tesla. KL also grew their revenue by 47%. What did they get from bone-crazy investors for that? They were beaten blue like some gang initiate on a jump-in. What about KL’s production cost? Q4 ’19 all-in sustaining cost, or “AISC” was $510.00oz.
KL trades at a 13.2 trailing vs. the 500’s 23.7. Forward P/E is 12.7 vs. the market’s 42. They trade at 17 P/Free Cash Flow and a 5.3 P/Sales. The market is at 28 and 2.4. Book value is 4 vs.the market’s 11.6.
A blowout quarter’s fine, but a blowout year ranks far better. During 2019 KL grew EPS by 104%. They grew revenue by 51%. They doubled their cash position to $707M., and doubled their dividend. They continued their share repurchase plan, expanded cap-ex spending, closed their acquisition of Detour Gold, and reduced their AISC by -18%. At FY $564.00oz. Kirkland is the lowest cost producers in the industry. Oops–and they increased their production by 21%, and also have zero debt.
KL’s now completed its’ acquisition of Detour Gold, which will add what? Acquiring Detour will add 60% to production, increase gold reserves by 285%, and boost free cash flow by 33%, on top of KL’s free cash flow growth last year of 81%.
Kirkland Lake Gold Ltd KL: NYSE 2-22-20
full year 2020 KL guides at 1.47M.-1.54M. ounces of production, at an AISC of $820-$840 an ounce. And why were investors unhappy with the Q4, FY’19 report? Fears surrounding the depletion of the company’s most productive property, the Fosterville mine located in Victoria, Australia. Yet a full three years of robust production remains at Fosterville, each at least equal to last years record haul.
Why did investors send KL’s price down by 30% on the news of acquiring Detour? KL has been the lowest cost producer in the industry. That now changes. Detour’s higher AISC will be responsible for bringing that record low up from $564.00oz. to 2020’s $820-$840.
Investors routinely offer the stability of teenage love affairs. A year ago Teledoc(TDOC) guided full year 2019 EPS growth down from 40% to 25%. Investors wailed and cursed the sky, and fled as though TDOC were a toxic warehouse fire. And then? TDOC shares posted a 66.3% gain. We feel KL will do much the same. Perhaps Friday’s 4.86% rage on 2.3x volume is that flag just again beginning to fly. The technicals are ugly, yet all rallies begin somewhere. Buy slowly. Watch the chart, and know that patience may be the most helpful tool in your bag. Friday’s strong move, and a yet rising 200-day SMA are good signs.
the close on Thursday Alteryx beat the $0.29 consensus EPS estimate by $0.35. The company posted revenue of $156.4 million vs. consensus of $130 million. Non-GAAP Net Income of $0.64 per diluted share represents a 100% year-over-year EPS growth rate. Revenues of $156.4m. posts a year-over-year revenue growth rate of 75.4%.
AYX habitually spikes hard on the day following earnings release. Q4 proved that rule. AYX posted a massive top & bottom line beat, marred only by a Q1’20 EPS guidance of -$007 to a -$0.11 estimate vs consensus of $0.05. On Friday shares raged upward by 9.49% on 2.5x average 6-month volume, and collected eight price target upgrades. We sold our entire position at $155.25, adding an additional 7.7% to our hard-fought gain. We had ridden AYX into the October depths. Yet we believed it would return, thus we were there for the 72.5% climb into a very nice profit.
After-hours trading proved muted. Routinely AYX spikes, returns, and spikes again. It spikes in the initial 30 minutes and the final 30 minutes of the post-earnings extended hours session. Such didn’t occur this time. Yet as covered above, and outlined in our piece below, the following day again proved an earning event.
pattern has been a three or four day decline–that’s three of the last four reports. We watched it do just that. We began a new start and a current cost basis of $144.28, on half of a position. Following each report, for at least the last five quarters, AYX shares have traded sideways and choppy for several weeks. The pattern allows an opportunity to build a reasonable cost basis once again. In our opinion, and that of at least 8 analytic firms, Alteryx has a very bright future, one in which we are already again participating.
Alteryx Inc. AYX: NYSE 2-22-20
Jam of the Day
“Up in smoke”
That Investing Journey