Why Frank Holmes Loves Royalty Companies

By frank holmes / June 03, 2015 / www.youtube.com / Article Link


At the Canadian Investor Conference in Vancouver this weekend, the Investing News Network had the chance to speak with Frank Holmes, CEO of US Global Investors (NASDAQ:GROW), about gold prices, gold stocks and the overall state of the market.So far this year, Holmes said he hasn't seen any real surprises from the gold price, although he noted that gold is normally a better performer in the second half of the year. When asked about what would push gold prices up, he suggested that a global catalyst would be a move from China to make the Renminbi a global currency alongside the euro, the yen and the US dollar.While he admitted that the market is certainly "in a paused stage," due to the threat of rising interest rates, Holmes added that "stocks are still the place to be."Speaking a bit about gold companies, Holmes said that he looks for management teams that are "good stewards of capital," and mentioned royalty companies in particular."I always love the royalty companies because you have a competitive advantage with that superior model," he said. Holmes specifically picked out Franco Nevada (TSX:FNV,NYSE:FNV), Silver Wheaton (TSX:SLW) Royal Gold (TSX:RGL,NASDAQ:RGLD) and Osisko Gold Royalties (TSX:OR) as key companies. "I think that these are great companies for any investor," he added.On the junior side of things, Holmes mentioned that Klondex Mines (TSX:KDX,OTCQX:KLNDF) is "a big holding" for US Global Investors. "The CEO is very much a frugal person in how he runs the business," he said. "I think that shows up in higher returns on capital."

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