Sprott Physical Gold Trust (TSX:PHYS.U) GF Value Rank : 0 (As of Apr. 29, 2024)

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What is Sprott Physical Gold Trust GF Value Rank?

Sprott Physical Gold Trust has the GF Value Rank of 0.

The GF Value Rank is determined by the price-to-GF-Value (P/GF Value) ratio, a proprietary metric calculated based on historical multiples along with an adjustment factor based on a company's past returns and growth and future estimates of the business' performance.

GuruFocus found that for valuation, we cannot simply give stocks a better GF Value rank simply because they have a lower P/GF Value ratio. Backtesting shows that over the long term, the two worst-performing groups are the most expensive group (with the highest P/GF Value ratio) and the least expensive group (with the lowest P/GF Value ratio).

We can understand why the most expensive group underperforms. We were initially puzzled by the underperformance of the least expensive group, but we realized there is a reason why some stocks are super cheap. If they look too undervalued, it is often because the businesses behind them are poor quality. The market realized this and gave them low valuations. In a way, the market is efficient.

After multiple backtesting analyses, we granted the stocks in third-cheapest percentile the highest GF Value rank, as they have performed the best over a full market cycle. Stock performance is actually not as sensitive to valuation as it is to growth and profitability. On average, the companies in the 20%-50% valuation groups have similar performances. Therefore, we should avoid the most expensive and the least expensive stocks. We can be more tolerant of valuation.

Please click GF Score to see more details on the GF Score's 5 Key Aspects of Analysis.

Sprott Physical Gold Trust GF Value Rank Related Terms

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Sprott Physical Gold Trust (TSX:PHYS.U) Business Description

Industry

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Traded in Other Exchanges

PHYS:USA PHYS:Canada

Address

200 Bay Street, Suite 2600, Royal Bank Plaza, South Tower, Toronto, ON, CAN, M5J 2J1

Website

https://www.sprottphysicalgoldtrust.com

Sprott Physical Gold Trust is a closed-end mutual fund trust. It provides a secure, convenient, and exchange-traded investment alternative for investors interested in holding physical gold bullion without the inconvenience associated with direct investment in physical gold bullion. It invests mainly in long-term holdings of unencumbered, fully allocated, physical gold bullion and does not and will not speculate about short-term changes in gold prices.

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