The upcoming results will determine the short term trend for the stock. It has done well recently with a near 30% rise from the lows. It is now taking a breather, and has corrected a bit from the highs. The appreciations is on the back of a healthy 10% rise in the price of gold, and it is important that gold continues to show strength. Corrections need to end quickly, and $1300 odd levels have to hold. On the upside, if gold can rise about 3-4% from current levels, then the short term outlook will surely improve. Things are better than what they were a few weeks ago. Pershing Gold (PGLC), a development stage company, started expansion of its exploration activities recently. So there are indications, but there is also a lot of skepticism about the future trend of gold. Bears have had a good run over the last few quarters, but they may not be too comfortable above $1350. The appreciation in FNV has stretched the valuations a bit, and the trailing P/E is now around 65, and it is trading at a forward P/E of 42. The price to sales is nearly 14. While streaming companies may command a premium due to the low risk business model, FNV does not compare too well with some other streaming peers. So it is important that the company delivers a good set of numbers, so that the valuations improve. Considering the pressure on margins of other companies, that seems a bit difficult. A positive surprise in Q2'13 can surely take the stock much higher as it has show a lot of strength recently. The balance sheet remains healthy with zero debt and a good amount of cash. The earnings of other major gold producers also need to be watched to get an indication of the overall health of the sector.
