1. A-Mark Precious Metals, Inc. (NASDAQ:AMRK)
2024 Performance: 36.6%
Number of hedge fund holdings in Q4: 15
A-Mark Precious Metals, Inc. (NASDAQ:AMRK), established in 1965, is a precious metals trading company. To know A-Mark’s CEO, Mr. Greg Roberts’ insights on the company please visit A-Mark Precious Metals, Inc. (NASDAQ:AMRK) Q2 2024 Earnings Call Transcript page. Investors consider precious metals as a safe investment during market volatility, and it is less responsive to changing market conditions. The considerable insider buying happened in February 2024 boosted confidence among investors in the growth prospects of A-Mark Precious Metals, Inc. (NASDAQ:AMRK). The growth estimate of A-Mark Precious Metals, Inc. (NASDAQ:AMRK) for the next year is 75.60%.
The hedge fund managers are also optimistic about A-Mark Precious Metals, Inc.’s (NASDAQ:AMRK) the value appreciation. In the Q4 2023 letter, Kingdom Capital Advisors discussed A-Mark Precious Metals, Inc.’s (NASDAQ:AMRK) in detail. Kingdom Capital Advisors was no longer holding A-Mark Precious Metals, Inc. (NASDAQ:AMRK), but expected to buy back it at lower prices due to its growth potential.
Praetorian Capital stated the following regarding A-Mark Precious Metals, Inc. (NASDAQ:AMRK) in its first quarter 2024 investor letter:
“As the world gets increasingly crazy, I believe that people will come to realize that ownership of precious metals, in physical form, as opposed to in a brokerage account, is part of being financially prudent. They will mostly likely buy those coins from a coin dealer, either in person, or online. A-Mark Precious Metals, Inc. (NASDAQ:AMRK) supplies both of those markets as one of the largest players in online coin brokerage through their JM Bullion, LPM, Silver Gold Bull, Goldline, etc. verticals, along with serving as one of the largest wholesalers to local coin shops. A-Mark also has stakes in two mints (Silver Towne and Sunshine).
A-Mark benefits from periods of chaos in two ways. They see transaction volumes increase, and they see the spreads that they can charge widen. During the three years from Fiscal 2021 to 2023, A-Mark earned approximately $7 a share, if you adjust for certain non-recurring items and remove non-cash intangible amortization. We acquired our shares for approximately four times this earnings level, which seems quite cheap for a business with such high returns on capital. That said, the business has seen reduced earnings over the past few quarters, as a result of declining transaction volumes and spreads. I believe that this decline in activity has created a unique opportunity to buy a high-quality business, with substantial insider ownership, at a bargain price. I naturally am enamored of the counter-cyclical nature of the business, which hopefully should help offset the risks to our portfolio in future periods of crisis…” (Click here to read the full text)
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