Gold Stocks for a Breakout: Royal Gold (RGLD)
Similar to the prior two companies, Royal Gold, Inc (USA) (NASDAQ:RGLD) is a name I trust to make the most out of a possible resurgence in gold prices. Although junior mining stocks have the greatest upside potential, a production setback or even something mundane like a labor dispute could end up derailing investors.
In contrast, RGLD has been around the block more than a few times.
With 38 producing royalties, and another 22 that are in development stage, Royal Gold is equipped to handle any market condition. In the years following gold’s parabolic move in 2011, RGLD has focused on cleaning up its financials. Recently, this has included paying down debts and cutting out administrative expenses. Through these efforts, RGLD has one of the highest profitability margins among gold stocks, as well as robust sales growth.
Additionally, Royal Gold scored an important earnings beat for its Q3 FY 2017 report. As a result of the company’s efforts, RGLD stock is up about 27% YTD. It’s also one of the few gold stocks that have managed to absorb recent volatility in the underlying gold market. Although mining investors haven’t had much to smile about, they can take reassurances from RGLD’s stability.
Of course, things can change pleasantly rather quickly should gold prices become great again!