Your Weekly Stock Picks - June 20, 2025Hello, savvy investors! This week, I'm highlighting two transformation stories from different continents – a gold miner in Ghana preparing for a major production breakout and an Argentine bank reinventing itself through digital innovation. Both offer compelling turnaround narratives with attractive valuations. Let's explore these opportunities! Galiano Gold (GAU): On the Verge of a Production BreakthroughLooking for a deep value play in the gold sector? Galiano Gold's recent struggles may be masking one of the most compelling transformation stories in small-cap mining. Don't let Q1 2025's weak numbers fool you – the company produced only 20,734 ounces due to a 14-day mill breakdown, not operational failure. This temporary setback obscures a much bigger story: Galiano is completing a multi-year infrastructure overhaul that should drive production 75% higher by 2026. Why Galiano deserves attention: - Over $100 million cash, zero debt, and positive operating cash flow despite Q1 challenges
- Owns 90% of Ghana's Asanko Gold Mine after buying out Gold Fields in 2024
- Production targets: 130-150k ounces in 2025, ramping to 180-210k in 2026, and 230-260k by 2029
- All-in sustaining costs expected to drop from current elevated levels to $1,200/ounce by 2028
- Trading at P/E below 5x and EV/EBITDA of just 3.6x – among the cheapest in the sector
The transformation strategy is clear and well-funded. Galiano deliberately reduced production from 160,000 ounces in 2022 to 115,115 in 2024 while investing in waste stripping, pit development, and infrastructure. The $20 million secondary crushing circuit (completing Q3 2025) will eliminate the throughput bottleneck that has constrained operations. More importantly, the company ended its Red Kite offtake agreement in 2024, meaning all gold now sells at full market prices instead of discounted rates. This change alone significantly improves margins at current gold price levels. The catalyst pipeline: The new Nkran pit (Cut 3) opens mid-2025 with ultra-high-grade zones exceeding 2 g/t. The Abore deep zone could become Galiano's first underground operation, with the initial resource report due end-2025. These developments underpin the aggressive production growth targets. Supervielle (SUPV): Digital Banking Revolution in ArgentinaWant exposure to Argentina's financial recovery with a twist? Supervielle combines traditional banking with fintech innovation, creating a unique growth story in Latin America's most volatile market. This isn't your typical Argentine bank. Supervielle has transformed into a comprehensive financial platform with over 600,000 active digital users through its IOL invertironline platform, and more than 50% of its portfolio now consists of consumer loans. What makes Supervielle compelling: - Q1 2025 financial margin with clients grew 15% year-over-year despite macro challenges
- Commission income surged 32% year-over-year, showing successful revenue diversification
- Trading at extremely low multiples: 1.06x forward P/S and 2.06x forward P/CF
- Projected 90% EPS growth in 2025 with revenue growth of 20% expected
- Pioneer in daily interest-paying peso and dollar accounts
The bank's strategic shift is paying dividends. While traditional income from sovereign bonds fell 86% year-over-year (reflecting Argentina's stabilizing debt markets), core banking revenue from lending and deposits grew substantially. This transition from volatile trading profits to sustainable banking income represents a healthier business model. Supervielle's digital transformation sets it apart from larger, traditional Argentine banks. The IOL platform provides investment services, insurance, and asset management in an integrated ecosystem. Net fees of AR$53.9 billion (up 32% year-over-year) demonstrate the success of this multi-service approach. The Argentina factor: With President Milei's economic reforms gaining traction, Argentina's financial sector could be entering a multi-year recovery cycle. Supervielle's agile structure and digital capabilities position it to capture disproportionate upside as the economy stabilizes. Despite strong deposit growth (+34% year-over-year) and maintaining solid capital ratios (CET1 at 15.3%), the stock trades as if the transformation isn't happening. Both companies offer exposure to transformation stories trading at deep discounts to their potential: Galiano Gold represents a classic operational turnaround in the gold sector. After years of investment and temporary production sacrifices, the company is positioned for significant output growth just as gold prices remain elevated. The combination of zero debt, substantial cash, and clear production catalysts creates an asymmetric risk-reward opportunity. For investors seeking gold exposure, Galiano offers compelling value at current multiples. Supervielle provides a unique angle on emerging market recovery through financial innovation. The bank's digital transformation and shift toward sustainable banking income could drive substantial revaluation as Argentina's economy stabilizes. While macro risks remain significant, the current valuation provides considerable downside protection. Both investments require patience as management teams execute their respective transformation strategies. Galiano appeals to value investors seeking commodity exposure with operational catalysts, while Supervielle offers growth investors a play on Argentina's potential recovery through a digitally-enabled financial platform. The key question: Are you willing to look past temporary challenges to capture the upside from successful business transformations? Both companies offer that opportunity at attractive valuations. Hey you—yeah, you reading this! We’ve got something special lined up this Monday… a live webinar with a very sharp friend of ours (trust me, you’ll want to hear what they’ve got to say). It’s going to be packed with value, insights, and probably a few “aha!” moments too. Don’t miss it—click here to save your spot now Until next time, FindBetterTrades | 
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