Why I Really Like AMRK stock

[Recyclersteve]

Just an update on A-Mark (AMRK). I still own it and it had a decent day Tuesday. Looks like it could be poised for a potential breakout soon. No guarantees of course!

The company announced something Monday that might have slipped under the radar.

Their share repurchase program, due to expire 6/30/23, has been extended ANOTHER FIVE YEARS. They are indicating they may buy up to another million shares of stock. Their float (freely traded shares) is only 17 million, so this is roughly 6% of the float.

Their P/E (price to earnings) ratio is only 6 in a market where many household names have P/E’s of 15-20. Nvidia (NVDA) has a P/E of OVER 200! Also, there are many who don’t have P/E’s because they are LOSING MONEY. Remember, with P/E’s, the lower the better.

AMRK is making lots of money, pays a dividend that is a very small percentage of their earnings, and buys back stock. So they pretty much have an open playbook in terms of strategies. Pay extra one-time dividends? Buy back stock? Buy out a competitor? They’ve done all those and, still, many have no idea this is even a publicly traded company.

I could see someone trying to buy out AMRK, but it almost certainly WOULD NOT be Berkshire Hathaway (BRK-A). Why? AMRK is worth about $800M- BRK-A is worth $700 BILLION. So AMRK is a bit more than 1/10 of 1% of BRK-A’s value. Even if they went up 1,000%, they’d still be only a bit more than 1% of Berkshire’s value.

But there could be another suitor right now who is licking their chops about potentially buying AMRK.

No matter how excited you might get, please read my disclaimer. AMRK is a great value right now, but that doesn’t mean it couldn’t go back down to the low $30’s or even the very high $20’s. IF IT DOES, I will likely buy even more and the company itself could potentially buy some of those even cheaper shares in the open market.

This is on the short list of my favorite stocks ever. It would be hard for AMRK to surpass Freeport McMoRan (FCX), which I traded 158 times (WITH ZERO LOSSES) in 2016. There were times where I had to double down or sell covered calls to avoid taking a loss. My average profit was $499.04 per FCX trade. I don’t currently own FCX because I think it is too expensive. I don’t want to short it until it becomes even more expensive. So, for me, FCX is in no man’s land right now.

Good luck to all.

[Cu Penny Hoarder]

When it was $4-5 yes, but now not a great value stock. 2 years and still no breakout. Plenty of other stocks out there better than this. Covered calls?... majority of ppl here reading this are not sophisticated traders.

[Doctor Steuss]

Just an update on A-Mark (AMRK). I still own it and it had a decent day Tuesday.

[...]

Out of curiosity, I just checked to see what my return would be if I sold my modest holdings today (that I picked up on your recommendation). 11.06%. Not too shabby.

Not selling though... I think it's been at least 5 years since I last sold any stocks. I buy, and hold... especially stuff that pays dividends above 2% like this.

[Recyclersteve]

An update on A-Mark (Ticker: AMRK) for anyone who follows stocks.

AMRK stock closed today at $40.40, within striking distance of the $40.93 year high and the $42.33 all-time high from 4/21/22 (adjusted for regular and special dividends paid since then).

With a P/E ratio of 6.55, this stock could double or triple and not be too expensive. Look back at the chart. You can see it went from $4.07 on 12/23/19 to $37.50 on 10/25/21, up a whopping 821%. It is important for a stock to take time to digest a move like that before going up again. The stock has been in a sideways pattern for about 21 months now.

No guarantees, but the stock appears to be in the process of breaking out now. Please read my disclaimer below before investing any money.

[Cu Penny Hoarder]

How much of the stocks movement is due to the company itself? The overall market movement tends to drag everything with it... up and down. Very difficult to evaluate the relative strength. It's easy to go long and pick winners when the market is going up... not so easy when market is going down.

[stas3000]

How much of the stocks movement is due to the company itself? The overall market movement tends to drag everything with it... up and down. Very difficult to evaluate the relative strength. It's easy to go long and pick winners when the market is going up... not so easy when market is going down.

For sure, some of the stock price growth can be attributed to general economy growth but as far as AMRK's stock performance is concerned, it's outperformed an index such as S&P 500 pretty well over the course of last year or three years. Dividends are a nice touch too. We'll see how it does in the next three or so years.

[Recyclersteve]

June 2nd this year was a turning point for lots of stocks according to Gary Kaltbaum of the Investors Edge radio show. Before that, you had 7 big name tech stocks doing really well, but market breadth was awful (IMHO).

Many can guess the 7 stocks that propped up the market: Apple, Microsoft, Meta, Nvidia, Tesla, Amazon and Alphabet (Google). Pretty sure that is the chosen 7.

So, until early June the vast majority of stocks were down (and often sharply) year-to-date. Let’s look at AMRK and adjust (as we should) for dividends paid out. AMRK closed on 12/30/22 at $34.18. On June 1st (the day before the overall market shifted as mentioned above) it closed at $34.31. So it was up a modest 0.4% in the first 5 months of the year. Still, I’d guesstimate that out performed 65-75% of stocks.

[Cu Penny Hoarder]

How much of the stocks movement is due to the company itself? The overall market movement tends to drag everything with it... up and down. Very difficult to evaluate the relative strength. It's easy to go long and pick winners when the market is going up... not so easy when market is going down.

For sure, some of the stock price growth can be attributed to general economy growth but as far as AMRK's stock performance is concerned, it's outperformed an index such as S&P 500 pretty well over the course of last year or three years. Dividends are a nice touch too. We'll see how it does in the next three or so years.

Past performance is no guarantee of future performance.

The tax treatment on stocks and dividends is not very good.

Trading futures and options is much better.

[Recyclersteve]

How about an update on AMRK stock? Most people would say the last couple of days qualifies not just as a breakout but a high volume one.

April 4, 2024 (TH)- closed at $30.72
April 5, 2024 (F)- opened at $30.64- closed at $32.73- volume was 614,900 (over double normal volume)
April 8, 2024 (M)- gapped up SHARPLY to open at $35.12 (up already by $2.39 or 7.3%)- finished day at $39.04 (up a whopping $6.31 or 19.28%)- volume was 1,752,400 (over 6x normal volume)

A very interesting part of the big (27.1%) move in just two days is this. You had a high volume breakout followed by a huge gap up the following day and that really high open was NEAR THE LOW for the day (opened at $35.12- low was $35.01). What was the news? I didn't really see anything of significance whatsoever. After the stock had already made a sharp move, Investor's Business Daily (IBD) mentioned it in an article they had. But that was AFTER the big move.

Earnings perhaps? Earnings aren't scheduled til the week of May 7th, so about another month from now. While I expect earnings to be solid with gold at/near all-time highs (and also the fact that A-Mark has a business relationship with Costco to sell 1 ounce gold bars), that wouldn't explain why the stock rocked higher on huge volume Monday.

This is a heavily shorted stock (over 10% is my definition of heavily shorted) by hedge funds and others who profit by their target stocks going down, not up. My speculation is that hedge funds (perhaps in cahoots with other hedge funds they know- see the movie Dumb Money to see how they often communicate with each other) saw some kind of technical indicator in the charts that was upsetting to them. This could be any of a number of items, but it appears that the 50-day moving average may soon cross above the 200-day moving average. If I was short this stock (and I've sold short literally thousands of times over the years), this would be something that would catch my attention.

I think that this could run to $45-50 fairly quickly, HOWEVER it is fairly common for breakouts to return to roughly the point of the breakout before the uptrend is resumed. In other words, this could go back down to Friday's high of $33.92 or thereabouts. Great, just great. So it could go up sharply or down sharply. What's so good about that? Fair question.

My gut feel is this and look back at the start of this thread and you will see that I've followed the stock closely for years (since at least 2020). I've traded it several dozen times and haven't booked a single loss. In fairness, I need to point out that I don't believe in buying something just once and hoping it will go up. I've been at this a long time and believe in buying strong stocks on pullbacks to reasonable levels. In checking my records, there were two separate instances where I had to buy AMRK a whopping 5 TIMES each (lowering my average cost each time) before I could get out with profits. I will admit that this stock has had periods of 2-6 months where it bored me to death. Some in the business would refer to that as "building a base before an ultimate breakout".

Did we get that breakout Friday and Monday? It appears likely that is the case, but please read this thread carefully before proceeding. If you buy at $39-40 because you are excited and sell at $34-35 because you can't take anymore pain, frankly I won't be sympathetic. No, I'm not some super rich guy who has unlimited funds to double down all the time.

Think about it this way. After a very nice move up, this stock still has a P/E (price to earnings) ratio of just 8.68. It could DOUBLE and still would not be an overly expensive stock.

Oh yeah, you want a bit more to get excited about? Insiders own 24.22% of the stock, much more than insiders at most companies. So their interests are aligned with shareholders, which I like. Also, the company pays a dividend and has also declared several special one-time dividends ($1 to $2 a share) in addition to their regular 20-cent quarterly dividend. Previously when I talked about the stock gold was in a long-term sideways pattern as many were getting bored to death by gold not being able to bust decisively above the magical $2,000/oz. level. So much for that bit of negativity! A-Mark is a member of the Russell 2000 small-cap index- so you have substantial (67%) institutional ownership combined with the strong insider ownership. In other words, insiders and institutions combined have over 90% of all the stock. That leaves very little for you and I, which could be part of the reason for the breakout.

Good luck to those who participate.

[Recyclersteve]

Oh yeah, here is yet another potential catalyst for AMRK. The all-time high for the stock price was $44.55 on 4/20/22. That was up very sharply (roughly tenfold) from a $4+ price tag in early 2020, so in a bit over 2 years. If this stock breaks decisively above the $44.55 level (and it isn't that far away now), it could have a mighty nice run. Some old-timers will remember the stock going up roughly 900% from 2020 to 2022. Wow, this one is really starting to look pretty special!