Although the stock has already outperformed the S&P 500 by more than 137% since I added the pick to my Motley Fool CAPS portfolio back in 2006, IAMBULLISH on IAMGOLD
IAMGOLD issued an update this week, warning that second-quarter production will come in below prior guidance and at higher-than-anticipated costs. Because markets are inherently short-sighted, I view any weakness in the shares resulting from this momentary hiccup as an attractive opportunity to climb aboard this proven outperformer of the gold patch.
Despite the setback, IAMGOLD continues to expect 2011 production of 1.1 million to 1.2 million ounces of gold, not to mention up to 5 million kilograms of niobium. Confident in its cash flow outlook even amid an aggressive capital spending initiative, IAMGOLD this week announced a 150% increase in its annual dividend to $0.20 per share. The resulting 1% annualized yield is actually better than that of rival Goldcorp
IAMGOLD is feeling some upward pressure on costs from higher fuel, labor, and other inputs, but this is a reflection of an industrywide condition that we are likely to see in subsequent results from midtier peers such as Eldorado Gold
Looking back to IAMGOLD, we find the company flush with cash from its recent sale of minority-interest assets to Gold Fields
Although the gold patch offers myriad growth vehicles that I consider capable of delivering outstanding shareholder returns for years to come, IAMGOLD has earned a stable spot in my own portfolio by consistently executing on well-devised avenues for strategic growth. I see more of the same going forward and encourage Fools to swoop in for a close inspection.
Fool contributor Christopher Barker can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He tweets. He owns shares of Eldorado Gold, Goldcorp, IAMGOLD, Taseko Mines, and Yamana Gold. 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.