Franco-Nevada (FNV)

Re: Franco-Nevada (FNV)

Postby winston » Fri Feb 14, 2020 8:39 pm

not vested

International Growth Play #2: Franco Nevada (FNV)

International growth plays come in all shapes and sizes, but most resource companies are headquartered in Canada. With a strong rule of law favorable to mining operations, it’s a good place for investors to get started in diversifying away from the dollar.

We’re no stranger to the company, as it’s a great resource play. The best part about it is the business model, which relies on royalties. Thanks to this structure, it’s difficult for the company to lose money, and it can be a multi-billion-dollar player in the space with a mere 34 employees.

But gold has a lot going for it right now. For the past four years, the metal’s price has been in an uptrend, which automatically increases the profits going to Franco Nevada from its royalty deals. Add in the periodic market scare like the coronavirus outbreak, and it’s easy to see why shares are likely to continue heading higher.

That’s seen easily in the company’s financials. Revenue is up 39 percent in the past year. Earnings are up a whopping 95 percent. And the company has a 28 percent profit margin, more in line with a technology play than a commodity one.

Shares are up more than 50 percent in the past year, but are likely to continue heading higher. That bodes well for investors. Looking at the overall market valuation, this stands out as a potential growth play with a solid international bent to it as well.

We like shares up to $114 based on these factors. The company pays a 0.9 percent dividend.

Source: Trading Tips
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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