There weren't any S&P 500 earnings reactions on Monday, but one of the world's largest Gold mining stocks had a reaction that caught our attention.
When it comes to mining stocks, the math is simple - rising commodity prices plus flat costs equals explosive margin growth.
That’s the beauty of this industry... Once the infrastructure is in place, every extra dollar in commodity prices drops almost straight to the bottom line.
In Gold, where prices have surged to record highs over the last year, the right companies aren’t just keeping up with the metal… they’re lapping it.
Franco-Nevada $FNV is a prime example.
This isn’t a dig-and-hope type of miner - it’s a royalty and streaming powerhouse that collects revenue from some of the world’s best mines without the operational headaches.
That means when Gold rallies, they get the upside without the heavy lifting or risk.
In Monday's report, revenue and EPS came in above expectations, but the real fireworks were in the price action. The sellers tried to slam the stock early, only for the bulls to power it back to close near session highs.
It was the market's way of sending us an unambiguous message: there's an overwhelming amount of demand for this stock.
If you’re interested in trading the best stocks in the mining industry, check out ASC Gold Rush - where Sam Gatlin and Jason Perz track the sector’s strongest setups and lay out actionable trade ideas.
Now, let's dig into the fundamentals and technicals of Franco-Nevada!
Flat costs, fat profits
Franco-Nevada’s cash cost per Gold equivalent ounce (GEO) has barely budged in a year, sitting in the low $300s.
Meanwhile, margins have soared from just over $2,000 per GEO in mid-2024 to nearly $3,000 today.
This is the royalty model in action... Operating leverage that scales with every tick higher in Gold prices.
The mines keep running, the ounces keep flowing, and shareholders are raking in the profits.
Outrunning the metal itself
Gold prices are up 40% year-over-year. That’s impressive - but Franco-Nevada’s net income is up 210%.
The operating leverage they possess is tremendous.
Across every significant metric, they are delivering growth well beyond Gold’s gains.
The company isn't just riding the wave of a new secular uptrend in precious metals - they're surfing ahead of it.
This is all powered by disciplined cost control and top-tier asset exposure.
Four failures, then the setup of the decade
For years, Franco-Nevada has been carving out a textbook accumulation pattern.
Slow and steady...
Now, the stock is on the cusp of breaking out to blue skies. If the bulls can stick the landing, the price will be in a brand-new primary uptrend.
With technicals, fundamentals, and macro tailwinds all aligned, we think it's go time for FNV.
The quarter that changed everything
From 2023 into early 2025, Franco-Nevada was a serial earnings disappointment, suffering five consecutive negative reactions.
Then came Q1 2025, when revenue growth exploded +43% year-over-year, and the stock snapped the dreaded beatdown streak.
This sparked a multi-week rally, which brought the price to where it is today.
Now the stock has delivered three straight positive earnings reactions, each one reinforcing the bull case.
Our favorite setups occur when fundamentals transition from a liability to an asset, accompanied by improving technicals.
That’s when conviction trades are born at The Beat Report.
Thank you for reading
-The Beat Team
P.S.: When it comes to uncovering dirt on stocks, there's no one better than Herb Greenberg.
He recently joined JC Parets in a special livestream to discuss why he's always skeptical of stocks, and why you should be too.
