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Thursday, September 20, 2012

IAMGOLD (IAG) Poised to Soar

IAMGOLD (NYSE: IAG) is as strongly positioned as any gold miner to take advantage of the misguided move by the Federal Reserve and Ben Bernanke to institute an open-ended stimulus program, which will acquire $40 billion of mortgage-backed securities on a monthly basis.

And if that doesn't work in the short term, the Fed hinted its ready to spend even more. Whether we agree with the action or not, we must take into account the implications for gold miners and the overall gold sector, adjusting our portfolios accordingly.

One such company that everyone interested in gold needs to consider is IAMGOLD. A number of traders recently poured money into call options on the company, seeing a bull move by the stock. In the last month alone it has jumped about 40 percent, and that's only the first stage of a big move which should end up with a double for those entering into the stock very soon.

The reason for the big upward move, other than the actions of the Federal Reserve, is a closer look at the resources held by the company, which have been undervalued by the majority of potential investors. That appears to have changed now, and the company and its investors are being rewarded handsomely.

IAMGOLD has been expanding its existing operations in anticipation of more stimulus measures from central banks around the world, and is about to bring online its Westwood mine. Probably the most overlooked property of the gold miner is its niobium mine and the accompanying rare earth elements, which will, over time, page huge dividends for the company.

For the longer term, IAMGOLD is also positioned to take advantage of acquisition opportunities that arise, as it enlarged its note offering recently to $650 million, which along with its current credit facilities, brings its total liquidity position to about $2 billion.

That means there is very little competition for those upcoming available properties the company can acquire to grow its resource pipeline. IAMGOLD was trading at $15.95, down $0.20, or 1.27 percent, as of 11:40 AM EDT.

4 comments:

alternative investing said...

IAM is a great longtime hold, no doubt about that

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