With earnings season in full bloom, one company that doesn't look particularly enticing on surface level is Royal Gold Inc. (NASDAQ:RGLD). While RGLD stock is easily beating the benchmark Nasdaq Composite index this year, it has floundered since early July. Ahead of its second-quarter disclosure scheduled for release this Wednesday after the market close, the timing lacks favorability. Nevertheless, RGLD is flashing a convincing quantitative signal that could potentially point to a reversal.
First, investors should appreciate the fundamental strengths of the business. As a royalty and streaming specialist, Royal Gold doesn't primarily involve itself in precious metal extraction. Instead, it offers cash upfront to producers. In exchange, Royal Gold either receives a fixed percentage of the revenue from a mine's production (royalty) or it exercises the right to buy the metal at a fixed, discounted price (streaming).
