Gold Stock Challenging 52-Week & All-Time Highs (RGLD, NEM, ABX, GG, GDX)

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We didn’t include Royal Gold, Inc. (NASDAQ:RGLD) in yesterday’s look at mining stocks where we outlined scenarios which would make 2009 a great year or a lousy year for the sector’s key players.  But investors certainly have been looking it over. Shares closed at $37.06 yesterday, about $3.00 from their 52-week high.  In fact, shares even briefly put in a new 52-week high on an intra-day basis.

The company has not announced anything. Trading volume has been rightaround average except for a couple of days in late November when itspiked. And the company’s P/E ratio for the trailing 12 months is about62, while its forward P/E is around 34. Pretty rich for a mining stock.

Well, Royal Gold doesn’t mine anything except royalty payments. Thecompany owns bits and pieces of royalty interests in dozens of  miningoperations. Real miners, like Newmont (NYSE:NEM), Barrick (NYSE:ABX),and Goldcorp (NYSE:GG), are off 52-week highs by as much as 75% anddown for the year between 20% and 40% while Royal is up for the year byabout 30%.  Even the Market Vectors Gold Miners ETF (NYSE: GDX) which tracks the gold miner stocks is down about 50% from recent highs.

Keeping its hands clean seems to be paying off for Royal and its shareholders. But those P/E ratios do look pretty bubbly.  With this company amassing a mountain of cash, maybe some are speculating a large one-time dividend (after a recent dividend hike) or maybe the company is going to be able to take advantage of lower prices making new deals more attractive for the company.  Whatever the reason is, seeing a gold stock challenging its 52-week highs is an odd event in this market.

Paul Ausick
December 12, 2008