In an interview with Streetwise Reports, Frank Holmes, CEO and CIO of U.S. Global Investors and executive chairman of HIVE Blockchain Technologies, discusses the path ahead for gold as well as the new investment area the firm plans to explore.
During the interview, Mr. Holmes shared his opinion on gold’s lateral movements this year and whether he believes there is potential for a year-end rally. Mr. Holmes stressed the importance of studying history and how, historically, gold has performed well relative to macro indexes like the S&P 500.
He went on to explain how U.S. Global Investors offers exposure to gold miners through the GOAU ETF, emphasizing how “even though gold has been fluctuating roughly between $1,700 and $1,850 per ounce, gold producers are actually in a much stronger position.” Hence, the GOAU ETF focuses on investing in precious metal mining companies that have high gross margins and high free cash flow.
During the interview, Mr. Holmes goes on to explain the methodology behind picking stocks for the U.S. Global GO GOLD and Precious Metal Miners (GOAU) ETF:
With GOAU, we have focused on “cherry picking” — or “high grading,” to use the expression in gold — those companies that have several key factors. They have to be very inexpensive on a relative enterprise value basis. They have to have revenue last quarter growing faster than the previous four-quarter average and cash flow last quarter growing faster than the previous four-quarter average, so they’re showing relative growth or cost control. And they have free cash flow to give them more interest. When we look at these factors, out of 100 names, it’s always challenging to get 25 names. When it comes to these stocks, it’s really about revenue per share and growth per share.
The full interview appears on StreetwiseReports.com. To learn more about the GOAU ETF and its current holdings, click the button below!
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U.S. Global Investors has authored and is responsible for the summary on this page. All opinions expressed and data provided are subject to change without notice. Opinions are not guaranteed and should not be considered investment advice.