CA - B2Gold: A Dirt-Cheap Valuation For This High-Margin Miner

2024-01-24 21:38:03 ET

Summary

• B2Gold has underperformed its peer group despite beating annual guidance, and we've seen a massive overreaction on its cost overrun at Goose and lower FY24 guidance.
• In fact, there are few miners that have more consistently beat guidance & grown per share metrics than B2Gold, making this a case of a high-quality name on sale.
• So, with a high double-digit FY2025 free cash flow yield and a 6.0% dividend yield, I see this pullback below US$2.65 as a gift.

Just over two months ago I wrote on B2Gold ( BTG ), noting that the stock looked attractively valued ahead of its year-end results with one of the highest free cash flow yields sector-wide. This turned out to be a terrible call with the down over 10% since this update, and it's a brutal Q1 for the sector with persistent selling pressure in what's typically the best month of the year. Unfortunately, B2Gold has underperformed its peer group despite once again beating its annual guidance, but the recent sell-off looks like a massive over-reaction, especially with the stock already trading at a high double-digit FY2025 free cash flow yield. In this update we'll dig into the Q4/FY2023 results and 2024 guidance, recent developments, and why B2Gold is a must-own name at a rare massive discount to fair value with a stronger portfolio, significant growth on deck, industry-leading margins and the ability to lock in a juicy ~6.0% yield while getting exposure to the gold price.

For further details see: