SAN FRANCISCO, CA--(Marketwired - July 12, 2017) - The rebalancing of the GDXJ and other factors offer buying opportunities in the precious metals space, says Ralph Aldis, portfolio manager at U.S. Global Investors, who discusses a number of companies he believes offer good value in today's marketplace.
Company included in article: Wheaton Precious Metals Corp. (
The Gold Report: What factors are making royalty and streaming companies attractive investment vehicles right now?
Ralph Aldis: There are several aspects. We look at factors like return on invested capital. It doesn't necessarily have to be extremely high; we just want to see that there's low volatility in those returns. The royalty companies do that very well.
The royalty companies are highly diversified, and thus, the geologic risk of any particular deposit really has been diversified away.
Additionally, royalty companies essentially get paid off the revenue line of other mining companies. They're getting paid first, and those cash flows have a high certainty to them because they're coming off the topline versus coming off the bottom line.
TGR: What royalty and streaming companies are at the top of your list?
RA: One of the three biggest and most successful ones has been Wheaton Precious Metals, which used to be Silver Wheaton.
When we had that downturn in the metal prices in 2015 and 2016, Silver Wheaton did very large royalties with some of the major miners that were producing gold as a byproduct. Those streams were in production and paying right then and there, so it immediately started getting returns on that.
Continue reading this interview: Undervalued Companies for the Precious Metal Portfolio
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