Legendary resource investor Rick Rule told me about three very different stocks he's buying right now. One is Sprott Inc. (SII), the go-to brand for precious metals exposure, notes Amber Kanwar, host of the In the Money with Amber Kanwar podcast.
Sprott is a leading asset manager specializing in precious metals and natural resources. Rick highlighted three key drivers for its shares.
- Precious Metals Bull Market Exposure: Rick believes we’re in a precious metals bull market, and Sprott, as a brand name in this space, stands to benefit significantly. Its assets under management (AUM) have doubled in two-and-a-half years, driving management fees higher while costs remain controlled.
- Strong Financial Position: Sprott generates substantial free cash flow, has paid off all debt, and offers investors a dividend. Rick suggests that owning Sprott allows investors to benefit from its entire portfolio of products rather than paying fees for individual funds.
- Takeover Potential: Rick suspects Sprott’s AUM could grow from about $40 billion to $100 billion USD in three-to-four years, making it an attractive acquisition target for major players like BlackRock Inc. (BLK) or Credit Suisse seeking a natural resources franchise.
