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They vet the A-Mark inventory to select the best pieces and capture the highest value.

Pinehurst – This business grades coins and sells to collectors at substantial premiums.Sales outside of the US and Europe represented ~11% of FY22 revenue, suggesting international growth could be material. Silver Gold Bull – Recent minority acquisition to expand sales primarily in Canada and Southeast Asia, with option to boost ownership to 75% in 2024.This is the largest US retail platform with APMEX as the main competitor. The typical retail customer for this business is younger and buys in smaller size than Goldline. JMBullion – acquired this mass-market platform in 2021 (JMBullion, Provident Metals,, , ).Predictably, this business does best in times of political tension. Goldline – Owned since 2017, this channel advertises heavily on FOX NEWS / FOX Business (Glen Beck is spokesman) and targets higher net worth retirees.Since 2020, the company has acquired and invested in multiple DTC channels to increase and diversify their customer-base: Gross Margins in the DTC segment hovered around 8% in FY21 and 7% FY22, vs 10% pre-Covid when the higher-margin “Goldline” was the company’s only DTC channel. Forecasting margins quarter-to-quarter is very difficult due to the significant fluctuations in supply and demand however, we believe A-Mark’s recent capital allocation has permanently improved wholesale margins, which we discuss later.ĭirect to Consumer - A-Mark’s DTC customers are retail buyers - the segment filled 859k tickets in FY22 for $2.1B revenue (~$2.5k/ticket). Margins in the wholesale segment hovered around 2% in FY21 and FY22, versus less than 1% historically. An additional $1.6B of inventory was transferred internally to the DTC segment. The wholesale segment completed 108k tickets in FY22 for $6.0B revenue (~$56k/ticket). Wholesale – A-Mark sells wholesale product to institutional clients and retailers. Sunshine Mint – A-Mark has 44.9% minority investment in the Sunshine mint, which provides silver blanks to the US Mint for minting Silver Eagles, strengthening the relationship.Product supplements total inventory, which improves sales margins. Silvertowne Mint – wholly owned mint supplying exclusive product for distribution.To alleviate some of the supply pressure, the company has invested in two privately-owned mints: The undersupply from this key channel forces A-Mark to buy more gold and silver eagles on the open market. Despite the ramp in production, the mints are still struggling to meet demand ( US, Perth mints see renewed demand for gold bullion Aussie silver shines bright) ( Congressional complaint leveled at Mint bullion program). From 2019 to 2021, production of US Silver Eagles and US Gold Eagles substantially increased. The company has historically sold 30%+ of the total product distributed from the major sovereign mints (US Mint, Royal Canadian, Perth, etc).

Supply – A-Mark sources precious metals to sell through its wholesale and direct-to-consumer channels. The current business platform is comprised as follows: While many investors are cautious with the precious metals space, A-Mark offers exposure to the commodity without being specifically tied to price volatility. In times of higher demand, premiums spike, which has recently resulted in significant profitability for A-Mark. Therefore, the business grows by increasing sales and margins. Income is primarily generated by charging a premium to the physical price of gold and silver products. It is important to understand that while A-Mark is selling a commodity, they completely hedge their inventory to eliminate price exposure (the latest 10-K stated less than $3m of their $741m inventory was subject to price risk.)Ī-Mark Inventory Hedging (AMRK 2022 10-K) Business OverviewĪ-Mark Overview (A-Mark Investor Presentation)Ī-Mark is a vertically integrated precious metals dealer selling gold and silver bullion. I believe A-Mark remains a compelling value investment at $29/share. The company has expanded from a low-margin precious metals wholesaler to a higher margin DTC retailer. Since I last profiled A-Mark Precious Metals ( NASDAQ: AMRK) on Seeking Alpha, they have completely transformed, generating ~$400m of EBITDA, acquiring new streams of revenue, and strengthening margins via vertical integration.