This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Self-Direct Your IRA Over to This Gold-Mining Stock

Stocks in this article: AGINEMGGABX

NEW YORK (TheStreet) -- I'm a strong believer of self-directed IRAs for retirement investing simply because it gives you the freedom to make your own investment decisions without taking away the opportunity of sufficient diversification.

If you're looking to buy stocks to maintain a balance, Alamos Gold (AGI) is one to consider.

Alamos is a name in the mining space that rarely gets mentioned, probably because it doesn't have the biggest reserves. But it's undeniable that all metrics available to us suggest the company is currently undervalued. Its shares, trading around $11, are down 14% for the year to date.

Alamos is super-efficient at keeping costs low, which helped the company to have the highest gross margin in a turbulent 2013.

In 2013, the company reported an all-in sustaining cash cost of $772 per ounce, which is one of the lowest -- if not the lowest -- in the industry. Just so you can appreciate that number, note that Newmont Mining (NEM) and Goldcorp (GG) reported all-in sustaining cost, or AISC, of $1,104 and $1,031, respectively.

Here is a history of top gold miners' AISC over the last two years.


The simple reason why Alamos Gold is able to outperform its competitors is it focuses on low-cost mines. And when a company can keep costs low in a very volatile industry like the mining industry, it's easy to keep healthy margins.

AGI Gross Profit Margin (Annual) Chart
AGI Gross Profit Margin (Annual)
data by YCharts

As the chart above shows, Alamos kept over 65% of its total revenue as profit. This becomes more appreciable when you compare it with other miners. Newmont Mining was the closest, with just a little more than half of what Alamos kept.  Alamos even outperforms the industry average of 47%.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs