Sprott Asset Management, managed by Eric Sprott, invests most of its capital in basic materials companies, including many precious metals miners. The fund recently filed its 13F for the fourth quarter of 2012, which discloses many of its long equity positions as of the end of December; therefore, this filing can serve as a guide to what the investment team liked at the beginning of this year. We can then do a brief introduction to some companies mentioned in the filing so that investors can decide whether they are interested enough to do further research on the stock. Read on for our quick take on five of Sprott’s largest holdings by market value at the beginning of 2013 and compare them to previous filings.
The fund’s top pick was First Majestic Silver Corp (NYSE:AG), a $2.1 billion market cap silver miner whose operations are primarily located in Mexico. Sprott owned 4.8 million shares of the stock, down slightly from three months earlier but still a larger position than in June 2012. First Majestic has struggled over the past year, with its stock price down and earnings coming in 11% lower in the third quarter of 2012 than a year earlier. Wall Street analysts believe that 2013 will be a better year for the company and so the current price is only 10 times their consensus earnings estimates.
Sprott cut its stake in Coeur d’Alene Mines Corporation (NYSE:CDE) but the global silver miner remained one of its largest positions with a stake of 1.2 million shares going into 2013. David Dreman’s Dreman Value Management also liked Coeur d’Alene in the third quarter of 2012, closing September with 1.5 million shares in its portfolio (see more of Dreman's stock picks). The company has also had its stock price decline, and revenue was down 33% in its most recent quarter versus Q3 2011. As with First Majestic, the current-year P/E multiple is more modest at 11.