Royal Gold, Inc. (NASDAQ:RGLD)

CAPS Rating: 3 out of 5

The Company, together with its subsidiaries, is engaged in the business of acquiring and managing precious metals royalties.


Player Avatar roob26 (86.40) Submitted: 9/18/2006 6:40:42 PM : Underperform Start Price: $25.83 RGLD Score: -80.34

5% projected earnings growth 3-5 years, yet priced as if it was to grow 41% annually during that period.

Gold - 22% down from it's high-water mark, so RGLD picks up some value there to those bullish on the price of gold.

Give people a reason to sell this stock, and I believe they'll take it.

Very bearish.

Member Avatar XMFSinchiruna (27.12) Submitted: 11/30/2007 3:17:09 PM
Recs: 1

Hi Roob,

While I respect your take on RGLD based upon projected earnings, but for another example of a similar company that had conservative earnings estimates blown out of the water during this bull market, just look at the success of Silver Wheaton (SLW) in the silver market. When gold is over $1,000 during the 1st quarter of 2008 (my prediction), RGLD will be doing just fine with its royalty contracts. And consider too that while mining companies are faced with increasing costs as the price of crude and other supplies increase, RGLD enjoys a fixed cost based upon existing contracts. This strategy for playing a commodities bull market is, in my humble opinion, a very compelling one, and I think SLW is a great case study to examine how RGLD is likely to perform. For anyone who prefers silver, check out Silverstone Resources, which is following in SLW's footsteps. :)

Keep in mind, people, that in the short term we are in a correction here... though likely a minor and short-lived one. The long-term trend remains uninterrupted and nothing is indicating a reversal. Over the coming days and weeks we will hear many pundits in the financial sphere touting the end of the gold bull market, trying to scare investors out, but this is just a bear trap... a desperation move by the powers that have been manipulating the gold market for years to maintain their hold on the price of gold. If you study the gold market, you'll see they are losing their ability to smack gold down, and then it's clear that the longer they keep it down, like right now, the more sure and the more pronounced its resultant rise. Buy gold or gold-related assets below $770, and especially below $750 if it gets there, and you'll thank me when it hits $1,000. :)

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