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Views on DEG, DYL and HLI

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Views on DEG, DYL and HLI

Hi James and team, Excellent service - keep it up! DEG - keen on your thoughts on this stock, particularly as you are bullish gold towards 24/25. At 500koz/pa at spot, its trading at 2.4x market cap. DYL - I note your strong preference for PDN but John Borsch 'Mr Uranium' is now behind DYL. Thoughts on DYL over PDN? HLI - note your continued bullishness toward Aus banks. You've mentioned HLI from time to time so obviously this is on your radar. Trades at a grossed up div yield of ~10%. Just announced a further $100M buyback, so still throwing off capital. Thoughts? Thanks, team - I really love your insights! Enjoy the weekend, Young

Answer

Thanks Young,

DeGrey Mining (DEG): We tend to like the gold companies that are producing more than the ones that are drilling out their resource. They have lots in the ground but have lots of money to spend to get it.  The main issues with gold companies of late has been costs, whether that be labour or otherwise, and those pressures are amplified when the $$ are not rolling in each quarter. We prefer Evolution (EVN).

Deep Yelllow (DYL): Agree that it’s a well credentialed team, although we cringe slightly at the term Mr Uranium! Production is still some way off, 26/27 from memory but that gives them a lot of leverage if pricing continues to rise. We like DYL, it is just higher risk, higher reward than PDN, so it comes down to risk appetite.

Helia Group (HLI) which is the old Genworth (GMA) mortgage insurance business, looks very interesting after it’s correction. A complicated business but we know it reasonably well.  We are looking at this one closely for our Income Portfolio!

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De Grey Mining (DEG)
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