Since the 2020 Covid crash I like Rick Rule think that we are in early innings of a Commodity Super Cycle. So far oil/gas has been fastest mover. Been blessed to make a killing on Canadian junior oil/gas stocks, most at least 5 bagged, many 10 bagged and one has as of today now 40 bagged, Petrus.
If you buy a stock (company) that has 20% or 30% or 40% annual profits or EBITDA yield you get a built-in 20% or 30% or 40% edge each year. The methods I have used for stock selection has worked a long time. Of records known of for over 20 years in the market, Buffet is 20% CAGR, I am 23.86%, George Soros is 25%, and Joel Greenblatt is 34.5%. Soros is a convicted insider trader, so hard to say how he did it, but the other three are all value investors.
My unique method is to focus on stocks I think can 5, 10 or more bag upward (times). And that if owned all of it, would yield 20%+ cashflow in the future on what I paid for it, inflation adjusted. So one rule is “Would I buy it at this price if were to buy 100% of the stock then take it private and never sell it?” If the answer is yes, they will likely by the stock.
My 3-year CAGR (Compounded Annual Growth Rate) is 97%. Below in the Globex article link are screen shots of my account statements that back that up.
So back to what is the safest stock with leverage to a super cycle for all metals? I would say Globex, GLBXF.
Globex Gets Big Royalties For Free, A Deep Value Stock For The Commodity Super Cyclehttps://ceo.ca/@geodan/globex-gets-big-royalties-for-free-a-deep-value-stock-for-the-commodity-super-cycle
It has an EV/EBITDA yield over 60%. Here is how the article starts:
Summary: Globex is a mining royalty company and a mine and mining claim wheeler/dealer with high growth, and deep value, and that is in the right place at the right time.
Globex often gets a 3% GMR, or Gross Metal Royalty, not the more normal 1% NSR. Since they sell the properties for a profit, those massive royalties are for free.
A 3% GMR is extremely valuable, if a mine they sell produces $2 billion in sales at a 10% profit ($200 million) Globex will get $60 million or 30% of the profits yet has no risk nor investment. If a client miner sells $2 billion of minerals and loses $50 million, Globex will still make the $60 million in profits.
They have over 200 mining properties and dozens of royalties yet are at a dirt-cheap valuation of Allen EV/EBITDA of 1.55, ROCE (Return on Capital Employed) of 1,926%, Current Ratio of 131 and with Sales Growth of 335%.
Recent Deals Globex Has Done
Globex Completes Sale of Francoeur/Arntfield/Lac to Yamana Gold Inc. for $15 Million
This was in 2022. Globex generally makes huge profit margins on their deals.
Manganese X Energy, Positive PEA for its Battery Hill, NPV10% of $486M US, and IRR of 25%
This is in May 2022.
o Average annual gross revenue of $177 million per year over the 47 years Project life
On this property, Globex did not buy it, they staked it, so a tiny investment in it. The original PR on it says Globex shall retain a 3% Gross Metal Royalty (GMR) on all recovered metals and minerals produced from the Property.%20Gross%20Metal%20Royalty%20(GMR)%20on%20all%20recovered%20metals%20and%20minerals.)
The most recent PR indicates Manganese X is trying to reduce that, but that is apparently still in place. Let's do some math on the PEA (Preliminary Economic Assessment). $177 million a year average means Globex gets $5.3 million a year for 47 years = $250 million and that is inflation protected. If prices are 50 times higher in 47 years (not unreasonable) then Globex would get $265 million just for that last year! And for something Globex did not even have to buy. This is a fantastic business model. And today Globex is at a tiny market cap.
Cheers
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