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Analyst Blog

Shares of Royal Gold (RGLD - Snapshot Report) screamed higher yesterday surging roughly 7.3% to clock $45.42 at the end of the trading session. Volume traded was 1,351,000 on that day, higher than the stock’s three-month average volume of 951,549 shares.

Royal Gold’s shares got a lift following a Forbes report which stated that it has ranked as a top analyst pick. According to Metals Channel, a study of analyst recommendations at the major brokerages revealed that Royal Gold ranked as #15 broker analyst pick out of the 50 stocks making up the Metals Channel Global Mining Titans Index. The index consists of the top fifty global leaders from the metals and mining sector. Analyst opinions from major brokerage houses were tallied and averaged to form the rank.

Denver-based Royal Gold acquires and manages precious metals, royalties and similar interests. By collaborating with capable operators, the gold royalty company focuses on building and managing a diversified portfolio of precious metal assets.

Royal Gold owns a large portfolio of production, development, evaluation and exploration stage royalties and similar interests located in some of the most prolific gold regions in the world. With this high quality portfolio, the company maintains upside potential through successful explorations by operators and benefits from the discovery and production of new reserves.

Royal Gold recorded a 7% rise in royalty revenues to $74.2 million in third-quarter fiscal 2013 (ended Mar 31, 2013). Higher production at Andacollo and Holt mines and continued ramp up at the Wolverine mine aided the results, offsetting the unfavorable impact of lower gold and other metal prices.

Royal Gold has a diverse portfolio and strong balance sheet which will help it to further invest in acquisitions. The Mt. Milligan copper-gold project is expected to generate substantial revenues once it comes online and is expected to account for 35% of Royal Gold’s royalty revenues once fully ramped.

Royal Gold, which currently retains a Zacks Rank #5 (Strong Sell), is slated to report its fourth quarter results on Aug 8.

Other companies in the gold mining industry with favorable Zacks Rank are NovaGold Resources Inc. (NG - Snapshot Report), Midway Gold Corp. (MDW) and Pretium Resources Inc. (PVG - Snapshot Report). All of them carry a Zacks Rank #2 (Buy).

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