2 Big Reasons Franco-Nevada Stock Popped 14.5% in July
Shares of Franco-Nevada Corp (NYSE: FNV) jumped 14.5% in July, according to data provided by S&P Global Market Intelligence. If surging gold and silver prices have attracted investor attention in the precious metals stock, management's optimism about growth opportunities should leave investors in the stock with a lot to look forward to.
To top that, while the stock has lost some ground so far this month as of this writing, Franco-Nevada just released impressive numbers for its second quarter, with management also issuing fresh full-year guidance after withdrawing the same in April.
Franco-Nevada runs a high-margin gold streaming and royalty business. Put simply, instead of exploring mine assets and extracting metals like a traditional miner, Franco-Nevada buys precious metals from third-party miners at predetermined percentages and significantly discounted prices under streaming and royalty agreements in exchange for funding them upfront. So while the discount means Franco-Nevada's cost of purchase is far below spot metal prices, it sells at market rates, thereby enjoying wide margins and cash flows.
Source Fool.com
