When we boil down what separates successful investors from also-rans, we get the ability to identify sources of value with multi-bagger potential, backed by clearly understandable reasons why buying a stock could see you coming out ahead over time.
The easiest way to identify multi-bagger stocks is by delving into the information the underlying companies offer you – including official website, financial statements, press releases and investor deck – and piecing together pictures of future operations worth having a stake in. Green flags to look out for include a profitable track record, seasoned and tailor-made management teams, and assets whose current and/or future value isn’t fully reflected in the stock price.
Because there is no universal way to screen for undervalued companies, knowing that high-PE (price-to-earnings) and low-PE stocks can yield satisfactory returns, it’s important to increasingly familiarize yourself with your domestic stock market to catch value dislocation opportunities as they arise.
To get your stock Rolodex rolling, here are three names to consider, each of which shared latest developments with Stockhouse over the past week:
G Mining Ventures
G Mining Ventures is bringing its flagship Tocantinzinho gold project in Brazil into production. The project contains 2 million ounces of proven and probable gold reserves, and is slated to begin commercial production in the second half of 2024.
A 2022 feasibility study estimates that the project will generate US$1.04 billion in free cash flow over a 10.5-year mine life at a base case of US$1,600 gold, which is 31 per cent lower than Thursday’s price of about US$2,315 per ounce.
When we pair this wide margin to the current gold price with G Mining Ventures’ market capitalization of only C$942.1 million, we see multi-bagger upside for existing shareholders, contingent on gold continuing to test all-time-highs and the decorated executive team’s (slide 55) ability to put up solid production numbers.
Louis-Pierre Gignac, G Mining Ventures’ president and chief executive officer, sat down with Stockhouse’s Ryan Dhillon to discuss the company’s acquisition of Reunion Gold, expediting its path to intermediate gold production. Watch the interview here.
G Mining Ventures stock (TSX:GMIN) has added 85.84 per cent year-over-year, and 1,300 per cent since 2019.
Mullen Group
Mullen Group, one of Canada’s largest logistics providers, oversees dozens of independently operated businesses active in less-than-truckload, truckload, warehousing, logistics, transload, oversized, third-party logistics and specialized hauling transportation. Besides 75 years of value-accretive acquisitions in these industries, Mullen also provides specialized services for the energy, mining, forestry and construction industries in Western Canada, including water management, fluid hauling and environmental reclamation, granting it diversified operations to better capitalize on rapid market changes.
Operating much like Warren Buffett’s Berkshire Hathaway, Mullen’s decentralized approach has allowed managers to create value idiosyncratically, while being able to rely on the corporate office for capital and financial expertise, legal support, technology and systems support, shared services and strategic planning. And create value they have.
Mullen has grown net income by almost 100 per cent over the past five years, from C$72.24 million in 2019 to C$136.72 million in 2023, keeping profits consistent through the COVID pandemic thanks to the essential nature of transporting goods.
While the company has been managing costs and pursuing restructuring and productivity initiatives to deal with an expected dip in 2024 construction spending and consumer demand, it generates enough cash to fund future acquisitions, continue growing its profitable operations, and increase its hefty dividend of C$0.72 per share per year.
With Mullen Group stock (TSX:MTL) down by about 57 per cent from its 10-year high, it’s hard to argue that the market is getting it right in terms of management’s business acumen and commitment to shareholder value.
Carson Urlacher, Mullen Group’s senior financial officer, joined Stockhouse’s Coreena Robertson to discuss the company’s financial results for Q1 2024. Watch the interview here.
Viva Gold
Viva Gold is a junior mining stock developing its Tonopah gold project in Nevada, only about a 30-minute drive from Kinross Gold’s Round Mountain mine, which produced 235,690 gold equivalent ounces and housed 1.97 million ounces of proven and probable reserves in 2023.
Viva has consistently grown Tonopah’s resources from a little more than 35,000 ounces of gold in 2017 to 600,000 ounces in 2022, and is looking to add further ounces after a recently completed 1,515-metre drill program to fill in gaps between programs in 2022 and 2023.
Initial results from this most recent drilling program intercepted a highlight of 50.5 m averaging 0.68 grams per tonne of gold (g/t Au) and 3 g/t silver (Ag). The company followed this up a few weeks later with multiple lengthy sections of high-grade gold, including 90 m at 2 g/t Au, all of which are expected to enhance Tonopah’s economics and resource base.
James Hesketh, Viva Gold’s chief executive officer, joined Stockhouse’s Ryan Dhillon earlier this week to discuss the most recent high-grade gold results from the Tonopah project. Watch the interview here.
Sitting at a 62 per cent loss since Tonopah was acquired in 2017, we believe Viva Gold stock (TSXV:VAU) is positioned for a multi-bagger re-rating, as the junior gold miner’s high-conviction management team – including a CEO who has led the development and construction of eight mines, and a former geologist at Kinross’ Round Mountain mine – usher Tonopah into pre-feasibility study work later this year, continuing the project’s reliable development track record.
Have a different take on our stock picks? What underappreciated names should investors give a second look?
Join the discussion: Find out what everybody’s saying about these value stocks on the G Mining Ventures Corp., Mullen Group Ltd. and Viva Gold Corp. Bullboards, and check out Stockhouse’s stock forums and message boards.
This is sponsored content issued on behalf of G Mining Ventures Corp., Mullen Group Ltd. and Viva Gold Corp., please see full disclaimer here.