Opinions
Javed Mirza
Franco-Nevada Corp.
FNV-T
PAST TOP PICK
Oct 17, 2024
Stock price when the opinion was issued
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Still suffering the shut-down of the Panama mine, though new discussions may arise about it. FNV has no debt. Arbitration could happen. Once Panama is back on line, FNV shares will resume their climb. He bought this just after the Panama situation. He's happy to hold this long term.
Gold is almost like an insurance policy. Good diversifier. Should be a good, long-term hedge. Deposits have become harder to find.
He prefers the business model of the royalty companies like FNV or WPM. As well, they operate counter-cyclically -- give money when gold prices are low and harvest when prices are high. Always looks expensive, but it's expensive for a reason.
They don't take on production and environmental risks, being a royalty company. They just cash the cheques, but their valuation has always been high. They took a big hit when their Panama gold operation was shut down; maybe that mine will reopen. Is in a volatile sector. Great balance sheet and history. Likes it and the sector now.
Gold has benefited from all the uncertainty. Valuation very rich. If you already own it, would've appreciated significantly; so it can provide a source of capital to recycle into things more undervalued. Gold hit all-time high this morning; he doesn't have a price target. Gold price highly correlated to volatility; so if things calm down, that price will moderate.
Likes it, but don't chase here.
Gold's done well. She typically doesn't invest in commodity sectors. If you want gold exposure, one preference has always been FNV because of its royalty structure. This means you don't have to worry too much about operating costs of the underlying mine. Performed very well long-term over the cycle.
It ranks 226. You could hold it but there are better opportunities in gold if it is heading to $4000, and better risk adjusted returns in other stocks.
In general the silver vs gold ratio has been bad but is turning the corner. There are no silver stocks in their top 25 'OK to buy list'
Really likes the precious metals sector, and we're in very early stages despite big moves. Right now, sector is consolidating. As a streamer, not the most leveraged to gold prices. But it's the safest and most consistent (along with WPM). Great company.
Trading above all the moving averages, which are moving higher. Pullback is probably an opportunity, most likely over the next 2 weeks. Good dividend grower over time. See his Top Picks.
Better stocks in the space such as OR, WPM, or AGI. FNV is catching up, and in the long, long run it will perform well. But right now, it's lagging, so he'd rotate out.