Q: Hello Peter,
I've held FNV shares as my gold allocation since Q4/2018. Currently, I have a "reasonable" return of 8% per annum including dividends. With all the legal drama FNV is realizing in Panama, is it wise to sell FNV and buy another streamer or hold FNV for the long run?
Sitting with a taxable cap gain of 28%. Seems like the impact of FM is going to be significant for future earnings. Please advise your wisdom. Thank you.
I've held FNV shares as my gold allocation since Q4/2018. Currently, I have a "reasonable" return of 8% per annum including dividends. With all the legal drama FNV is realizing in Panama, is it wise to sell FNV and buy another streamer or hold FNV for the long run?
Sitting with a taxable cap gain of 28%. Seems like the impact of FM is going to be significant for future earnings. Please advise your wisdom. Thank you.
5i Research Answer:
It is a difficult call, as much of FM's woes are likely already priced in to the shares of FNV. FM's mine represents about 22% of FNV's revenue, and FNV stock is down 20% this year. Yesterday management re-affirmed guidance despite the drama in Panama. FNV may flat line for a period of time, but we think it recovers from this. Any positive news from Panama (probably quite unlikely) could move the stock up significantly. If not taxable, we might sell and re-examine FNV in the new year. But in a taxable account with a gain we think it can be held now. This view is partially supported by our view on the sector as well.