RGLD

Royal Gold Inc

Industrial/Transportation


Presented:01/21/2016
Price:$25.79
Cap:$1.68B
Current Price:$145.79
Cap:$9.58B

Presented

Date01/21/2016
Price$25.79
Market Cap$1.68B
Ent Value$3.69B
P/E RatioN/A
Book Value$35.31
Div Yield3.57%
Shares O/S65.05M
Ave Daily Vol1,097,008
Short Int6.06%

Current

Price$145.79
Market Cap$9.58B
Royal Gold, Inc. engages in the investment, acquisition, and management of precious metals royalties and streams. It operates through two segments include: Acquisition and Management of Royalty Interests and Acquisition and Management of Stream Interests. The company was founded on January 5, 1981 and is headquartered in Denver, CO.

Publicly traded companies mentioned herein: Barrick Gold Corp (ABX), Franco-Nevada Corporation (FNV), Glencore PLC (GLEN LN), Goldcorp Inc (GG), Newmont Mining Corp (NEM), Royal Gold Inc (RGLD), Silver Wheaton Corp (SLW), Thompson Creek Metals Company Inc (TC)

Highlights

Shares of Royal Gold (RGLD) - the gold streaming company - are undervalued at ~$25 - $26, and the price of gold does not need to skyrocket for the stock to appreciate meaningfully. The presenter is attracted to its 12% FCF yield and the leverage inherent in the model (very little capex is required). He believes the counterparty risk relating to Thompson Creek’s potential bankruptcy has created an excellent buying opportunity, and is long the stock with the intention of holding the position for the next two-to-three years. If the presenter’s assessment of the situation is accurate and the issue with Thompson Creek is resolved in a favorable way, the “massive value gap” to peers who are trading at 4% - 5% FCF yields will close and shares could ultimately double in value.

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Idea Discussion

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