Royal Gold, Inc. - Momentum

Michael Vodicka
|
Posted: Sep 14, 2011 12:01 AM
Royal Gold, Inc. (RGLD) has seen huge gains over the last two months, with shares up as much as 30% as gold hit a series of new all-time highs. With estimates on the rise and gold fever running strong, this Zacks #1 Rank stock is at the top of the momentum chart.

Company Description

Royal Gold, Inc., through its subsidiaries, acquires and operates precious metals royalties in exploration and production companies. The company was founded in 1981 and has a market cap of $4.47 billion.

Royal Gold has been gaining on higher gold prices, but shares also got a boost after the company reported strong Q2 results in mid August that included record revenue and strong earnings growth.

Fourth-Quarter Results

Revenue for the period was a record, up 46% from last year to $59 million. Earnings also spiked, jumping to 39 cents per share, up from 21 cents last year.

The good quarter was driven by a simple combination of increased production and higher realized prices, scoring an average sale price of $1.369 from $1.089 last year.

Estimates

We saw some decent movement in estimates off the good quarter, with the current year adding 6 cents to $1.84. The next-year estimate gained 16 cents to $1.98, a solid 7.5% growth projection.

Valuation

In light of recent gains, shares do look a bit pricey, trading with a PEG ratio of 6.2, well above the benchmark of 1 for value.

12-Month Chart

On the chart, few stocks have been as strong as RGLD for the last two months, hitting a string of new highs as gold does the same. Take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.
 
ROYAL GOLD INC (RGLD): Free Stock Analysis Report
 
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