Is Yamana Gold a Buy Ahead of Earnings?

Yamana Gold (TSX:YRI)(NYSE:AUY) is one of the top gold producers in the world. Shares of the Toronto-based company were down 2.35% in mid-afternoon trading on April 22. The stock has plunged 7.1% in 2019 and has encountered turbulence in April due to weakness in the spot price of gold.

Yamana recently announced that it will release its fiscal 2019 first-quarter results on May 2. The company had a solid conclusion to fiscal 2018, but Yamana has struggled to string together positive quarters in recent years. This has kept the stock in flux even as the yellow metal has demonstrated strength in late 2018 and early 2019.

In 2018 revenue per ounce of gold hit an average of $1,263 compared to $1,250 in the prior year. Total revenues fell marginally to $1.798 billion compared to $1.803 billion in 2017.

Net debt as at December 31, 2018 was $1.66 billion. This month Yamana announced the $1 billion sale of its Chapada mine to Lundin Mining (TSX:LUN).

Executive chairman and Yamana founder Peter Marrone boasted that this move leads to "a complete cleanup" of the company’s balance sheet. Investors did not react well to the deal, but it should provide a brighter picture in reports to come.

Yamana is an enticing addition as of close on April 22. The stock hit an RSI of 26 which puts it in oversold territory ahead of its next earnings release. The spot price of gold has hit turbulence in April, but there are still many tailwinds for the yellow metal going forward.