- Elemental Royalties was one of the worst-performing royalty/streaming names in Q1, down 8% vs. a positive performance for most of its peer group.
- The underperformance is likely due to the fact that a sweetened bid from GROY is looking less likely, and Elemental saw ~12% share dilution from its recent raise.
- As highlighted by Elemental, it trades at a discount to its peer group, but with a mediocre development pipeline and lower growth than Nomad, I see this discount as justified.
- With the stock sitting out the recent rally, the valuation is reasonable, but I continue to see more attractive places to park one's money in the sector and see some downside risk if the deal falls through.
For further details see:
Elemental Royalties: Valuation Gap Beginning To Close