Forty per cent of Sprott’s $9.7-billion in assets under management are invested in bullion, while the precious metals exposure rises to 70 per cent when one includes the gold and silver equities in its mutual and hedge funds.
Eric Sprott, the firm’s founder and architect of the dominant precious metals theme, is a big believer that the price of gold and silver – as stores of value – will climb as governments debase their currency by printing money to stimulate their economies. While the metals stocks have sharply lagged their bullion peers, the firm argues that these oversold stocks are poised for a rebound.
“We believe that the prime catalyst for this stock continues to be a rally in precious metals equities,” says Scotia Capital Markets’ Phil Hardie. “Given recent weakness, we believe the valuation is now looking quite reasonable for those who ascribe to Sprott’s underlying investment themes.”
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