AMRK - i finally picked up some shares of this one near close at 30.85 when a bid filled. I like these comments from Kingdom Capital over at S.Alpha, where he's written a couple of articles about AMRK. In the comments thread he observes:
Kingdom Capital 10 Feb 2021
Thoughts on the call:
[Mgmt] Confirmed the past month has been unprecedented in terms of customer acquisition and demand. Having integrated supply chains (mints to consumer) gives them a huge edge over competition. They have a lot more capacity coming online at Silvertowne mint in the next few weeks. Q3 is going to be really good, and their customer base just increased dramatically.
Further to the comments below, I can't get past how good this JM Bullion deal is for AMRK. Right now, it looks like they'll issue about 1.5m shares, and be able to finance around half the cash portion with cash on hand. So they're probably looking at $50m of debt to do the deal, lets say at 6% to get a round $3m of annual interest expense. So AMRK and JM combined should be approaching $140m of TTM pre-tax annualized earnings, before you factor in some synergies, or around $110m post-tax. So with 8.5m shares, that's $13/share [EPS].
Put another way, at $35/share, post deal they'll be around a $300m market cap with minimal leverage, and earnings over $100m per year. This acquisition managed to be attractive to investors despite the low multiple already being given to AMRK. Hats off to Management on a great deal.
