El Segundo-based metals brokerage A-Mark Precious Metals Inc. has benefited from the rising price of gold, and its shares have increased 26.5% so far this year.

Among its biggest leaps was from an adjusted close of $32.57 on April 5 to an adjusted close of $38.85 on April 8, an increase of 19%. On April 5 the company announced a 20-cent dividend effective April 15. 

The adjusted stock price reflects that dividend. 

The company’s share price reached a 52-week high adjusted closing price of $40.47 on April 12. 

Shares in the company closed at $36.88 on April 18.

Gold prices have spiked recently and hit a 52-week high on April 16, when the metal closed at $2,407 an ounce. That is a nearly 14% increase over the closing price of $2,113 on Jan. 2 and an almost 7% increase over the April 1 closing price of $2,257. 

The rise in gold prices signals investors are anticipating rate cuts from the Fed later this year but might be uncertain about the prospects of squashing inflation without throwing the U.S. economy into recession, according to an April 9 story by CNN.

The news site also said that central banks are going after gold – and driving the price up – because they want to lessen their reliance on the U.S. dollar.

The gold price spike occurred mainly in April, after A-Mark reported its most recent financials.

For its fiscal second quarter ending on Dec. 31, A-Mark reported after the market closed on Feb. 6 net income of $13.8 million (57 cents a share), a significant decrease from the net income of $33.5 million ($1.35) in the same period of the previous year. Revenue increased 7% from the second quarter of the prior year to $2.1 billion.

The share price decreased by nearly 3.5% from the adjusted close of $26.98 on Feb. 6 to an adjusted close of $26.05 the following day. 

Kathleen Simpson-Taylor, the chief financial officer of the company, said during a Feb. 6 conference call with analysts that, excluding an increase of $232 million of forward sales, revenue in the second quarter decreased by about 7%.

“Which was due to a decrease in gold and silver ounces sold, partially offset by higher average selling prices of gold and silver,” Simpson-Taylor said during the call.

According to A-Mark President Thor Gjerdrum, the company sold 450,000 ounces of gold in the second quarter, which was down 20% from the same period a year ago.

As for silver, the company sold 26.6 million ounces of the metal in the second quarter, a decrease of 30% from the second quarter of last year, he said during the conference call. 

A-Mark Chief Executive Greg Roberts presented during the conference call the highlights of the quarter, outlining how the company continued to enhance shareholder value by increasing its share-repurchase program by buying back an additional 440,000 shares of its common stock for approximately $12 million.

A-Mark announces acquisitions 

There was also an announcement that same day of A-Mark entering into a letter of intent providing for three transactions with AMS Holding LLC, in Eagan, Minnesota. During the conference call, Roberts detailed the transactions, which included the proposed acquisition of LPM Group Limited, one of Asia’s largest precious metals dealers. 

On Feb. 27, A-Mark announced that it had closed the three transactions and had paid $42 million for LPM Group, consisting of $38 million in cash and $4 million of A-Mark common stock, with the potential for additional cash payments to AMS based on the achievement of specified earnings targets.

“This strategic acquisition is an important step in growing A-Mark’s international presence in Asia and reflects our commitment to expanding A-Mark’s global reach,” Roberts said. 

In addition to the LPM transaction, Pinehurst Coin Exchange, of which A-Mark owns 49% and is one of the nation’s largest distributors of modern certified coins, will be acquiring all of the assets of ModernCoinMart from AMS for $5.5 million.

ModernCoinMart is one of the more established modern bullion coin dealers in the U.S. and also ships to many international locations, Roberts said. 

“Through this strategic acquisition, Pinehurst intends to further expand its direct-to-consumer business and its product offering to its customers,” Roberts added.