Yamana Gold (AUY) Soars to 52-Week High, Time to Cash Out?

Have you been paying attention to shares of Yamana Gold (AUY)? Shares have been on the move with the stock up 8% over the past month. The stock hit a new 52-week high of $3.79 in the previous session. Yamana Gold has gained 54.7% since the start of the year compared to the 8.1% move for the Zacks Basic Materials sector and the 44.8% return for the Zacks Mining - Gold industry.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 24, 2019, Yamana Gold reported EPS of $0.05 versus consensus estimate of $0.02.

For the current fiscal year, Yamana Gold is expected to post earnings of $0.08 per share on $1.61 billion in revenues. This represents a -33.33% change in EPS on a -9.62% change in revenues. For the next fiscal year, the company is expected to earn $0.15 per share on $1.46 billion in revenues. This represents a year-over-year change of 80% and -9.07%, respectively.

Valuation Metrics

Yamana Gold may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

Yamana Gold has a Value Score of C. The stock's Growth and Momentum Scores are C and B, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 43.5X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 7.7X versus its peer group's average of 10.3X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Yamana Gold currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Yamana Gold fits the bill. Thus, it seems as though Yamana Gold shares could have potential in the weeks and months to come.

How Does Yamana Gold Stack Up to the Competition?

Shares of Yamana Gold have been moving higher, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also looking good, including Sibanye Gold (SBGL), Alamos Gold (AGI), and Kirkland Lake Gold (KL), all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.

The Zacks Industry Rank is in the top 7% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Yamana Gold, even beyond its own solid fundamental situation.

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Yamana Gold Inc. (AUY) : Free Stock Analysis Report
Alamos Gold Inc. (AGI) : Free Stock Analysis Report
Sibanye Gold Limited (SBGL) : Free Stock Analysis Report
Kirkland Lake Gold Ltd. (KL) : Free Stock Analysis Report
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