Investment opportunity assessment | Stock market analysis | Fund allocation

Business need

  • A UK-based private bank providing banking, financial planning and wealth management services to its High-Net-Worth Individual (HNWI) and institutional clients was evaluating an investment opportunity in the US equity market to allocate funds towards the mining sector stocks.
  • The client sought advisory services of RocSearch first to identify three stocks and then prepare a brief investment research note on each of the stocks, highlighting the key positives and investment risks.

To identify attractive equity investment options for fund allocation in the mining sector.

The client outlined two key reasons for selecting RocSearch:

  • Our proven investment advisory capabilities and extensive experience in stock performance analysis.
  • Our experienced team of investment researchers with a wide exposure to working with financial services firms.

Approach and Methodology

  • Our investment advisory team conducted a stock screening exercise to identify three stocks meeting the client’s investment criteria and with the potential to deliver long-term value. We undertook an in-depth analysis of each company identified in the mining sector for the client’s portfolio.

RocSearch meticulously screened the mining stocks, evaluated multiples, analysed their financials and trading patterns and tracked the peer group’s price movements.

  • Each stock was evaluated based on the analysis of various trading and transaction multiples, fundamental analyses, and ratio analyses covering the balance sheet strength and dividend payment potential of the companies.
  • RocSearch conducted a detailed financial analysis of the companies and studied the recent insider trading pattern and the stocks’ reaction to major news and announcements.
  • We also conducted a peer group analysis for the various companies in the US Gold & Precious Metals mining space. We charted their share price movement to understand the impact of changes in the gold and silver spot prices.

Business Outcomes

  • The investment note helped the client to identify three fundamentally strong stocks with long-term value propositions and the ability to deliver consistent returns, correlated with the price of gold.
  • The client benefited from the anticipated price rally of precious metals, as investors flocked to the safe-haven allure of gold and the companies trading in it.

The investment note helped the client to identify fundamentally strong stocks capable of delivering consistent returns correlated with the price of gold.

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