Ten out of its 13 analysts rate this mining exploration a ‘Buy’ or ‘Strong Buy’. The other three are ‘Holds’. And four of the analysts have increased their 2016 EPS forecasts in the past 30 days.
Osisko Gold Royalties (OR.TO)
From Adrian Day’s Global Analyst
Osisko Gold Royalties (OR.TO) is all cashed up, as its two core royalties proceed well. It has about C$650 million available for investments (of which $260 million is cash), after spending about C$220 million in the last year on several royalties.
In addition to the cash and credit, Osisko now has 53 royalties. Its two core royalties are performing well. Canadian Malarctic offers a high 5% royalty on one of Canada’s premier mines, with a long-life, low-cost profile, and continues to meet guidance. The new Eleonore, another long-life, low-cost mine, is overcoming ramp-up hurdles as the advance royalty is now fully paid.
With the cash, Osisko is on the hunt for new assets, preferably a large, cash-flowing asset. With its strong core assets; growing royalty investments; innovative royalty growth model; and strong balance sheet Osisko remains a strong holding. As a newer company with less diversified revenue sources, the stock is trading at a discount to the group (1.2 times book versus over 3 for Franco), and the stock has underperformed the last six months.
At the current depressed price, Osisko is a buy.
Adrian Day, Adrian Day’s Global Analyst, www.adriandayglobalanalyst.com, 410-224-8885, March 28, 2016