A-Mark Precious Metals may profit from increased awareness
When the torpedoed World War II British cargo ship SS Gairsoppa was found three miles deep in the North Atlantic in 2011, the big winners were the salvagers and — eventually — A-Mark Precious Metals Inc. of Santa Monica.
On board the steam merchant vessel were more than 198 metric tons of silver ingots.
The first company allowed to make and sell coins from the salvaged treasure — and only to U.S. buyers — was A-Mark Precious Metals. That’s according to the British Royal Mint, which announced in April that the SS Gairsoppa Britannia Quarter-Ounce Silver Coins would be available for sale worldwide.
“It has a great deal of history attached to it, and the product is selling very well,” A-Mark Chief Executive Gregory N. Roberts said.
In the world of expensive metals, A-Mark has clout.
A-Mark calls itself a full-service precious metals trader, operating centers in Santa Monica and Vienna for buying and selling precious metals. A-Mark’s services also include storage and financing.
“Our customers are mostly bullion investors,” Roberts said. “We don’t deal directly with the retail public. We are a wholesale distributor and our customers sell to the public.”
Manufacturers and fabricators are also customers, Roberts said.
“We will supply to any manufacturer that needs us,” Roberts said, “whether they are making a catalytic converter for a car that requires platinum or making tinted windows for a building, which requires gold.”
A-Mark currently offers more than 200 coins and bars of varying weights, sizes, thickness and purities. Displayed on its website are coins including gold Sovereign Kings, silver Austrian Philharmonics and platinum American Eagles and Australian Koalas.
The company began as A Mark Coin Co. in 1965.
In 1968, it was the first company to buy U.S. Silver Certificates and then sell and trade them for U.S. Government Silver Bars.
A-Mark was granted a special gold-dealing license by the U.S. Treasury Department in 1972.
In 2005, Greg Manning Auctions Inc., which sells rare coins and stamps, acquired 80% of A-Mark for $16 million. That same year, Greg Manning changed its name to Escala Group, then to Spectrum Group International Inc. in 2009. Spectrum later acquired the 20% of A-Mark that it didn’t own.
A-Mark is one of Southern California’s newest public companies, spun off by Spectrum to trade on the Nasdaq Global Exchange only since March of this year.
A-Mark said last month it was included in the Russell Microcap Index.
“Joining the Russell Microcap Index represents an important milestone for A-Mark that we expect will increase awareness of our accomplishments,” Roberts said.
In the fiscal year ended June 30, 2013, sales reached $7.2 billion, down 7% from a year earlier, while net income rose 18% to $12.5 million.
A-Mark is one of just six companies that are authorized buyers of the U.S. Mint’s gold, silver and platinum products. That means it can buy bullion products directly from the U.S. Mint for sale to customers.
A-Mark is also an official distributor for many of the world’s largest mints, including those of Britain, Canada, Australia and Austria.
For a company with fewer than 50 employees, Roberts said, there are challenges in keeping up with the scale of the business.
“Our revenue is going to approach $8 billion” this fiscal year, Roberts said. “Any time you have volume like that it’s a challenge to manage. But we feel we are really good managers.”
Operating trading centers on two continents, in Santa Monica and Vienna, is also complicated, Roberts said, adding “our business has a lot of moving parts.”
The company does not yet have regular analyst coverage.
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