Tag Archives: Aurizon Mines

Business, Finance, Occupation & Industry

Princess Leia, Golden Arches Help the Dow Set its 4th Record

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By Dan Caplinger, The Motley Fool

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The string of record-high closes for the Dow Jones Industrials reached four today, as the Dow climbed 68 points on the heels of a strong employment report. Some economists downplayed the report, arguing that it doesn’t yet fully incorporate the impact of higher tax rates for 2013 as well as other looming threats, like government spending cuts under the sequester. Yet, investors weren’t inclined to worry too much about those future fears, instead taking the S&P 500 to within 1% of its record-high close back in 2007.

Within the Dow, Disney was the top gainer. The stock rocketed higher by almost 2% after the company announced that the next installment of the Star Wars saga would feature original Princess Leia actress Carrie Fisher, along with Harrison Ford, and Mark Hamill, who played Han Solo and Luke Skywalker, respectively. With billions of moviegoers waiting impatiently for the seventh film in the series, Disney has some serious star power to send the movie into hyperdrive.

McDonald’s climbed 1.7% after announcing its sales results for the month of February. Even though same-store sales disturbingly fell again, one thing to note is that last February had 29 days due to the 2012 leap year. Once you take out that impact, same-store sales worldwide were actually up 1.7%. Still, the domestic introduction of Fish McBites, and other attempts to boost revenue, didn’t produce the results that the company had hoped for. The company needs to reawaken growth in order to sustain its share-price gains.

Trucking giant Navistar jumped another 11%, adding to its 28% gain yesterday. As often happens, an analyst upgrade provided a second leg up for the stock after the company’s strong earnings results prompted yesterday’s rise. With activist investor Carl Icahn involved in the stock and endorsing the company’s new CEO, Navistar appears to have made big strides in turning itself around.

Finally, Hecla Mining rebounded 4% after a big drop earlier in the week after the company made a bid for Aurizon Mines. Investors were initially worried that Hecla may have overpaid for the company in its attempt to outbid Alamos Gold, but an analyst upgrade suggested that the acquisition may actually add value for Hecla going forward.

Has Lucasfilm made Disney a must-buy for investors? Find out in The Motley Fool’s new premium research report, which lays out the case for investing in Disney today. This report includes the key items investors must watch, as well as the opportunities and threats the company faces going forward. So don’t miss out — simply click here now to claim your copy today.

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Alamos Gold Won't Raise Bid for Aurizon

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By Rich Duprey, The Motley Fool

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Alamos Gold said that despite Hecla Mining offering a higher bid to its own proposal to acquire Aurizon Mines , it would not raise its consideration, as it believes its bid is superior.

In January Aurizon’s management urged its shareholders to reject the C$780 million offer because it was too low and added development and geopolitic risks. Instead, they voted this week to approve a C$796 million offer Hecla made. 

Alamos says despite the lower bid, its offer is actually better for Aurizon shareholders because the Hecla proposal creates a “highly leveraged, hedged, debt-laden, financially constrained company.”

Since Alamos is Aurizon’s largest shareholder, with 16% of the stock, and because other large stakeholders have sided with it, Hecla may find it difficult to reach the required 66.67% approval threshold. Alamos also says Hecla is borrowing heavily to make the deal work; has hedged a large portion of its revenues from gold production; would dilute Aurizon shareholders’ gold exposure because 80% of Hecla’s revenues are from silver; and Hecla has produced less silver each year since 2009.

Alamos president and CEO John A. McCluskey was quoted as saying, “Our goals over the next few years include achieving production that positions us as one of the 25 largest gold mining companies in the world, while remaining among the 10 lowest-cost mining companies in the world.”

Alamos’ offer is open for acceptance until 5 p.m. today.

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The article Alamos Gold Won’t Raise Bid for Aurizon originally appeared on Fool.com.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Tuesday's Top Upgrades (and Downgrades)

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By Rich Smith, The Motley Fool

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This series, brought to you by Yahoo! Finance, looks at which upgrades and downgrades make sense, and which ones investors should act on. Today, our headlines feature downgrades for Texas Roadhouse and Aurizon Mines . But it’s not all bad news, so read on, and find out why one analyst thinks you should…

Fill up on Cracker Barrel
Another day, another higher price target for Cracker Barrel . Last week, we were talking about how the country store-cum-country cookin’ restaurant parlayed an $0.18-per-share “earnings beat” into a new $81 price target at analyst Miller Tabak. Today, analysts at Argus Research are going even further than that — reiterating their buy rating on the stock and predicting that before a year is out, Cracker Barrel shares will be fetching $88 apiece.

Now here’s the problem: I was a bit ambivalent when Miller Tabak endorsed Cracker Barrel last week, because at 15.7 times earnings, but only 10% projected long-term earnings growth, the stock looked overvalued to me. Today, Argus is both arguing for a higher price target ($88 versus $81) and saying Cracker Barrel will get there from a higher starting point (16.3 times earnings versus 15.7).

Needless to say, Argus is setting itself a higher hurdle on this one, and one more difficult to clear. (Worth saying, though, is that investors seem to recognize this, and are currently selling off Cracker Barrel shares despite Argus’s endorsement — a pretty clear case of “sell the news” if I ever saw one.)

My hunch: Cracker Barrel is fairly valued today. Maybe even a bit overvalued. That said, if you’re dead set on owning it, the workaround I described last week is still there for the taking. Biglari Holdings , which owns a 20% stake in Cracker Barrel and sells for a cheaper price-to-free cash flow ratio, with a faster growth rate, offers a compelling way to buy a piece of Cracker Barrel‘s growth without paying the sticker price on Cracker Barrel stock. I like it so much, I own it myself.

Don’t stop at Texas Roadhouse
Continuing today’s comfort-food theme, our second analyst recommendation today concerns Texas Roadhouse. Once again, it’s Miller Tabak stepping up to lend some advice. This time, however, Miller is feeling more cautious, downgrading TR to hold, and recommending investors be more cautious about the stock.

Make no mistake: Miller still likes Texas Roadhouse quite a lot, praising the company for producing above-peer-group same-store sales while also expanding its profit margin. It’s also got a faster growth rate.

On the other hand, though, at 20 times trailing earnings, Texas Roadhouse looks even more expensive than Cracker Barrel. Its dividend is slightly smaller, too — 2.5% versus 2.6%. And most important of all, Texas Roadhouse is currently generating less free cash flow ($61 million) than it reports as net income under GAAP ($71 million). That’s as contrasted with Cracker Barrel, which actually produces slightly more …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Hecla to Buy Aurizon Gold

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By Rich Smith, The Motley Fool

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Finally, Aurizon Mines‘ board of directors has found a suitor it can live with. More than a month after the Canadian gold miner rejected an offer from Alamos Gold , Aurizon announced on Monday that it has agreed to sell itself to Hecla Mining in a deal valued at C$796 million, or $C4.75 per share.

This tops Alamos’ offer, valued on Jan. 14 at C$780 million, or C$4.65 per share. (Translated into American dollars, the newest deal is worth less than the previous one. Aurizon and Alamos are based in Canada. Hecla is based in Idaho.)

The new deal, valued at C$796 million ($774.5 million), calls for Hecla to pay each Aurizon shareholder either C$4.75 ($4.63) or 0.9953 of a Hecla share per Aurizon share owned. One caveat is that Hecla wants to not issue too many shares, nor be forced to come up with too much cash all at once. For this reason, there is a caveat to the purchase offer — total cash consideration is not to exceed C$513,631,193 ($500.3 million), nor shall total shares issued exceed 57 million.

Assuming a nice mix of shareholders electing to be paid in Hecla shares, and shareholders preferring cash, Hecla is targeting a mixed payment averaging C$3.11 ($3.03) cash plus 0.34462 of a Hecla share per Aurizon common share bought.

Aurizon’s Board of Directors is backing Hecla’s offer. The board defends choosing Hecla’s offer over Alamos’ earlier offer by saying that Hecla’s price is about 12% above the “implied current value of the Alamos offer, based on the closing share prices of both Alamos and Aurizon on March 1, 2013.” The parties say they expect to close this deal sometime in Q2 2013. Shareholder and regulatory approval are required. If the deal falls through, Aurizon has agreed to pay a termination fee of C$27.2 million in certain circumstances.

Alamos said it will not increase its offer, which expires at 5 p.m. today. It said it continues to believe the “combined company resulting from the merger of Alamos and Aurizon will be in a far better position to return value to Aurizon shareholders over the near-, mid- and long-term, than the company which would result from the Hecla offer proposed by the Aurizon board.”

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The article Hecla to Buy Aurizon Gold originally appeared on Fool.com.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Why Hecla Mining's Shares Dropped

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By Travis Hoium, The Motley Fool

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Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.

What: Shares of Hecla Mining fell as much as 13% today after the company announced an acquisition.

So what: Hecla announced that it’s buying Aurizon Mines for $759 million. Aurizon investors will get either C$4.75 per share in cash or 0.9953 shares of Hecla’s stock. After the drop, it looks like investors think the cash offer will win out and Hecla will have to add debt to pay for the acquisition.

Now what: If the stock doesn’t recover before the acquisition’s close, Hecla will need cash, and the Bank of Nova Scotia has committed to $500 million in financing. This would be a big addition of debt, given the company’s barely profitable year in 2012. I don’t see this acquisition as a reason to buy the stock, and given the amount of debt the company will probably have to add, I would be a seller given the volatility in gold right now.

Interested in more info on Hecla Mining? Add it to your watchlist by clicking here.

The article Why Hecla Mining’s Shares Dropped originally appeared on Fool.com.

Fool contributor Travis Hoium and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance