'We're in a stealth bull market' - Nicole Adshead-Bell on generalists buying resource stocks

Most resource companies lack good communication strategies, said Nicole Adshead-Bell, principal at Cupel Advisory.

This week Adshead-Bell recorded Digging Deep with Kitco Correspondent Paul Harris at the Gold Forum Americas / XPL-DEV 2024 in Colorado.

Gold is having a staller year, hitting several all-time highs, but equity performance has not matched expectations, particularly among juniors and developers. A select number of companies are doing well. Bell anticipates increased merger and acquisition (M&A) activity as companies seek growth opportunities, which would further investor interest in the resource sector.

"I think there's some bifurcation. I heard a very good description at the [Precious Metals Summit Beaver Creek] conference last week, which was 'we're in a stealth bull market.'" said Adshead-Bell. "We have gold at near record highs, and yet there's not the equity performance that one would expect when we've seen this very nice performance in the underlying gold price. We haven't got the marginal investor here, but for the first time I'm seeing generalists at this conference, and I'm getting incoming calls from generalists who are starting to look at the sector."

Bell emphasized that commodity markets, especially gold, are cyclical, and understanding the phase of the cycle is key to making informed investment decisions.

She also discussed the challenges of messaging in the mining sector, highlighting that many CEOs struggle with effective communication, which limits investor engagement. Bell observed that poor storytelling and a lack of enthusiasm from leaders are major obstacles for companies to attract investment, especially in a competitive market.

She stressed the importance of strong communication skills among executives, pointing to leaders like Robert Friedland and Rick Rule as examples of excellent communicators who successfully connect with both institutional and retail investors.

0:00 - Resource company CEOs have to be better story tellers
2:02 - Not enough enthusiasm when telling the resource story
4:34 - It's a competitive space
7:11 - Generalist investors starting to come into the resource sector
9:08 - Are margins going to improve?
10:40 - Fear of missing out driving deals?

 
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