Osisko Gold Royalties Ltd. (NYSE:OR)

I readily admit that I have been a bit of a gold and silver bug since I began my personal investing journey. Almost since I first opened a stock account with a broker, I have owned some sort of gold or silver stock. Thankfully, I have learned quite a bit about the industry since that time and have become a little less *ahem* aggressive with my love of these stocks.

Osisko Gold Royalties is considered a streaming company, which is a model I have liked since the introduction of Silver Wheaton quite a few years back. I have bought and sold SLW and Sandstorm Gold quite a few times, with some mixed results. One thing the streaming companies have taught me well, you don’t have to own a miner or the direct commodity to be exposed to the PM’s. This has been a good lesson for me since many of the miners are very capital intensive and it sometimes takes decades for a mine to be approved, built and producing.

Osisko entered the market in mid-2014 to very little fanfare, even in the precious metals community. G&S have been on the outs with investors since about 2011 when prices began falling as the market began recovering from the recession. The great thing about commodities, though, is they’re cyclical so you can count on the peaks and troughs occurring every few years. If you are nimble and pay attention to the market, it’s a great way to pick up a resource company for cheap and resell in a few years for a handsome profit.

This company is profitable and has a relatively strong balance sheet for its size. They have been growing both the top and bottom lines for the past several quarters. I’d be surprised if they don’t eventually start paying a small dividend to reward their loyal shareholders with some cash flow. I like the fact that they have picked up several streams recently that will be automatically accretive to their earnings, such as the Taseko mines silver stream at Gibralter mines.

I think the markets are more uncertain today than anytime all the way back to 2007. I think chances are relatively high for a correction, even if the VIX seems to never agree with my opinion. The more volatility and uncertainty, the better G&S both do. But the best part about this streaming company, the commodity prices don’t have to improve at all for their business model to be successful. If it stays steady, or even increase slightly., this is going to be a big winner in the long term. Disclosure: I do own a little of this in my real life portfolio and might be adding additional shares in the future.