The future was looking so bright for Sprott Inc. After two very rough years when its stock traded at less than 40 per cent of its $10 IPO price, the shares took off during the commodity bull run that started in late 2010.
In less than six months the stock price more than doubled from about $3.40 per share to around $8. Things looked even rosier when the stock hit $9.60 in early 2011, which meant Sprott had, finally, almost recovered to its IPO price.
Yet the last year has been anything but rosy. The commodity supercycle fell apart, and so too has Sprott’s bull run. The shares today trade just north of $6, and hit $5.35 in December. Much like the miners themselves, Sprott is heavily reliant on where metal prices trade, and those prospects aren’t so hot right now.
Sprott also released its 2011 numbers a few days back, and the results weren’t very encouraging. Assets under management at year end came in at $9.1-billion, and its preliminary estimate of gross performance fees was $4-million. BMO analyst Atul Shah noted that both came in “significantly below” his estimates.