Sprott Global Resource Investments focuses on the natural resource sector for three reasons. First, it is an investment sector that our company’s founder has been
involved with for over 25 years and an industry where our investment executives have a wealth of experience. Second, we believe we can provide you with the greatest value by specializing in one sector and being the best in that sector. Finally, we believe that carefully selected exploration mining stocks may offer opportunities for better-than-average returns, provided that the investor is willing and able to accept the higher risk inherent in these stocks.
Along with our technical evaluation of companies’ projects, Sprott Global employs fundamental analysis in virtually all of our research efforts in order to determine the high quality value-based investments. While evaluating trading patterns might be useful to some investors, we believe value-based investing provides better long-term returns.
We use our extensive experience in the natural resource and financial industries to analyze the differences between the price at which a company is trading in the markets and its actual underlying value. Simply stated, underlying value is a mathematical calculation that considers a company's existing net assets (assets less liabilities), along with its future cash flow potential. It is the goal of every value-based investor to profit from these disparities.
Why do these differences between market price and underlying value occur? First, assumptions used to calculate underlying value may vary from one analyst to another. Second, many investors don't utilize fundamental analysis in making investment decisions. Finally, investors have a tendency to overreact to economic or corporate news, causing a share price to move more than it should based on the underlying fundamentals.
At Sprott Global, we look for investment opportunities in the natural resource sector that are currently out of favor with the general investment community. We track political and economic cycles, as well as asset classes that are being ignored. We dig deep in an attempt to identify value in the market, which is why you will not find us talking extensively about the stocks you hear about on the nightly business news.