Update: Sandstorm Gold Initiates Stock Repurchase Program

| About: Sandstorm Gold (SAND)
This article is now exclusive for PRO subscribers.


Sandstorm Gold is going to repurchase up to 5.9 million shares over the next year.

I had not anticipated this in my previous article.

This is a quality buyback announcement that makes sense given the recent share price and gold price weakness.

Sandstorm Gold (NYSEMKT:SAND) just announced that it is going to be buying back up to 5.9 million of its own shares on the open market starting December 17th. The program has a 1-year duration.

This is a very promising sign, and a reflection of Sandstorm's strong capital position in the face of falling gold prices. We have not seen many gold companies in a position to buy back their own shares, and many have been issuing shares as they attempt to stay alive or finance projects that banks want no part of in the face of falling gold prices. Furthermore, we often see stock buyback programs initiated near market highs - not lows - as is evidenced by the aggressive programs we've seen of late.

Investors will recall that I argued that the market is valuing Sandstorm more as a gold junior than as a royalty/streaming company. While it is riskier than your typical gold royalty/streaming company, many of the company's royalties and streams provide a solid cash flow stream - the more speculative assets in the portfolio are being given very little value.

When the market turns, Sandstorm will likely command the premium it once did, considering the fact that royalty/streaming companies have a unique advantage over their mining company counterparts - low, stable costs.

With this in mind, and considering the company's current valuation and its large cash/equivalent position ($91 million as of the end of Q3), this may be a good time to consider getting long the stock.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.