Sprott Inc.

Overview

This report provides a detailed investment analysis of Sprott Inc. (SII) using the CAN SLIM framework popularized by William J. O'Neil. The analysis evaluates Sprott's financial performance, market position, stock momentum, and risk factors to determine an appropriate investment rating. Sprott is a specialized asset manager focused on precious metals and critical materials investments.

Financial and Business Overview

Sprott is a global asset manager specializing in precious metals (gold, silver) and critical materials (uranium, copper). The company operates through Exchange Listed Products (physical trusts and ETFs), Managed Equities, and Private Strategies. Q3 2025 results showed explosive growth: Assets Under Management (AUM) reached $49.1 billion, up 56% year-to-date, driven by market appreciation and record inflows ($1.1B net sales in Q3). Management fees grew 30% YoY to $50.7M in Q3. Adjusted EBITDA surged 54% YoY to $31.9M ($1.24/share), while reported net income of $13.2M ($0.51/share) was muted due to non-cash accounting changes for a new stock-based compensation plan. The company increased its quarterly dividend by 33% to $0.40 per share. Financially, Sprott is strong with $75.1M in cash (as of June 2025) and no debt on its $75M credit facility.

Market Position & Competitive Advantages

Sprott holds a dominant, specialist position in niche natural resource investing, particularly in physical precious metals trusts and uranium. Its exchange-listed products segment is the growth engine, with AUM surging from $6B in 2018 to over $30B in Q2 2025. The company benefits from high-margin, sticky AUM in its physical trusts (net management fee rate ~0.39%). It has successfully innovated with new ETF launches, expanding from less than $400M in ETF AUM in 2022 to over $4.5B. This positions Sprott as a key beneficiary of macro trends favoring hard assets, inflation hedging, and energy transition (uranium). However, the business is heavily exposed to commodity price cycles (precious metals, uranium). Revenue is dependent on AUM levels, which can be volatile. Competition exists from larger, generalized asset managers and other commodity-focused funds.

Stock Performance

SII has been a standout performer. As of December 2, 2025, the stock traded at $89.60, up 11.17% for the day and near its 52-week high of $94.83. It has dramatically outperformed, with a 52-week return of +102.58%. The stock is in a strong uptrend, trading 5.9% above its 50-day moving average ($84.57) and a remarkable 38.6% above its 200-day moving average ($64.66). Volume trends are stable, with a 3-month average of ~180,471 shares. The stock's momentum score from Trendlyne is 'Technically Moderately Bullish' (67.9/100).

CAN SLIM Analysis

Conclusion

Sprott is a exceptionally well-run company riding powerful secular and cyclical trends in commodities. Its business is booming, and its stock reflects that. Applying CAN SLIM principles, it scores well on Earnings (underlying), New Products, Leadership, and Market Direction. However, the 'C' (current EPS) is clouded by accounting noise, and the stock's massive run-up and elevated valuation multiples suggest limited near-term margin of safety. At current levels, the risk/reward is balanced. It is not a candidate for new purchase on weakness, but existing holders should maintain positions given the strong underlying trend. A pullback to a more attractive valuation, perhaps towards the 50-day moving average, would present a better buying opportunity.