Value Stocks: 1 Cheap Asset Manager to Buy Now

Sprott Inc. (TSX:SII) offers investors access to best-in-class precious metals and real asset strategies.

| More on:

Sprott (TSX:SII) is recognized internationally for expertise in resource investing, particularly in the precious metals area. The importance of this brand recognition resides primarily in the role it plays in attracting new investors and employees to the company. Sprott recognizes that protection of this brand is important to the continued success of the company’s business.

Recurring revenue sources

Sprott derives revenues principally from management fees earned from the management of the company’s investment products and from performance fees earned from the investment of the assets under management (AUM) of the company’s investment products. Accordingly, growth in the company’s carried interest and performance fees is based on both the growth in AUM and the return earned by the company’s investment products. In addition, the company derives revenues from commissions earned on advisory fees and finance income from co-investments in lending funds.

Experts in precious metals investing

The company offers investors access to best-in-class precious metals and real asset strategies. Sprott’s team of portfolio managers have a deep understanding of precious metals and natural resource investments and a long track record investing in the sector. By taking a consistent, disciplined approach to investing, based on sound fundamental analysis and independent research, Sprott’s investment management team carefully assembles a portfolio of holdings to meet the client’s investment objectives.

Sprott takes a team-based approach to the investment decision-making process. Themes and opportunities are discussed daily among the company’s investment team. Further, Sprott’s resource lending division is focused on providing financing to companies within the natural resource sector, primarily through the lending funds.

Robust product pricing structure

All of the company’s products have a fee structure that consists of both a management fee component and a performance fee component. Sprott collects management fees calculated as a percentage of AUM and earns performance fees as a percentage of excess performance over the relevant benchmark and the increase in net asset value over a predetermined hurdle.

Superior marketing strategy

The company focuses distribution efforts primarily in the United States through Sprott’s family of exchange-traded products. Exchange-traded products also provide broader distribution to investors in many countries including Canada, the United Kingdom, as well as countries in Europe and Asia. The company actively promotes product offerings through a sales team, public and investor relations, marketing, and social and traditional media platforms.

Profitable services divisions

Through the merchant banking division, Sprott generates investment ideas within the company’s core areas of expertise and provides focused advice and capital raising services to corporate clients. The merchant banking division is led by a team of seasoned resource banking professionals and benefits from the company’s deal-flow and brand recognition in the natural resource sector.

The company’s advisory services division focuses on providing a high level of service to Sprott’s direct private clients. Whether dealing with high-net-worth individuals or institutional investors, the advisory services division attempts to inform clients of Sprott’s market outlook. The advisory services division also provides investors with monthly reports, email updates, and web postings.

Overall, Sprott’s current stock market valuation looks enticing for long-term investors in the precious metals sector.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Nikhil Kumar has no position in any of the stocks mentioned.

More on Metals and Mining Stocks

todder holds a gold bar
Metals and Mining Stocks

Canadian Mining Stocks: Buy, Sell or Hold?

Investing in quality gold mining stocks that trade at a reasonable valuation could help you beat the TSX index over…

Read more »

People walk into a dark underground mine.
Metals and Mining Stocks

Is First Quantum Minerals Stock a Buy?

Let's dive into whether First Quantum Minerals (TSX:FM) is worth buying at current levels, or if investors should sit this…

Read more »

nugget gold
Metals and Mining Stocks

Competitive? Beat the Market With These 2 Dividend-Paying Growth Gems

Investors looking to beat the market buying dividend stocks right now need to focus on this right sectors. Here are…

Read more »

nugget gold
Metals and Mining Stocks

A Canadian Billionaire Investor Sold Micron Stock and Bought This TSX Company Instead

Prem Watsa focuses on value over short-term growth.

Read more »

Concept of multiple streams of income
Metals and Mining Stocks

Is Franco-Nevada Stock a Buy for Its 1.2% Dividend Yield?

Gold royalty stocks represent a niche in the precious metals industry. They have different dynamics from mining stocks.

Read more »

todder holds a gold bar
Metals and Mining Stocks

The 1 Mining Stock Canadians Should Buy and Hold Forever

Newmont is a gold mining stock that trades at a cheap valuation, making it a top investment choice for those…

Read more »

Metals and Mining Stocks

Top Canadian Gold Stocks to Buy Now

Canadian gold mining stocks such as Barrick Gold and Kinross Gold are two top investments in October 2024.

Read more »

todder holds a gold bar
Stocks for Beginners

Is the Worst Over for SSR Mining Stock?

SRR Mining stock has been rising higher after recent earnings performance that made a bit of a comeback. So is…

Read more »