Three Stocks at a Crossroads: Eldorado Gold, RE Royalties and Lululemon

Lululemon Athletica: Was That Already the Sell-Off?

Lululemon Athletica has significantly changed the global urban landscape. It all started with women in Vancouver who wore leggings, athletic leggings, even in their everyday lives. Lululemon thus transformed athletic wear into everyday fashion and pioneered the "athleisure" segment. But the hit product, leggings, has now become a problem for the company, which was founded in 1998. Competition has intensified, particularly in the yoga segment, where Lululemon pants can easily cost EUR 100 or 150. Alo Yoga, Vuori, and others are gaining market share. And perhaps the weakening economy is also taking its toll. Sales in the women's leggings category plummeted by about 20% during the quarter.

And that had an impact when the quarterly results were announced. Lululemon's stock subsequently plummeted by more than 15% and is currently trading around the USD 100 mark. In Q2 (as of August), revenue of USD 2.40 billion was below the previous year's level and fell short of market expectations. Same-store sales, a key retail metric, declined by 9%, and in the crucial North American market, they fell by as much as 12%. The management team led by newly appointed CEO Heidi O'Neill was forced to lower its forecast significantly. Revenue for this year is now projected to be only between USD 10.35 billion and USD 10.50 billion. Earnings per share are expected to decline to between USD 9.48 and USD 9.73 compared to the previous year.

Lululemon's stock has lost about 80% of its value since its 2024 peak. For renowned investor Michael Burry, it is one of his largest portfolio holdings. He announced via social media that he would use prices around USD 100 to expand his positions. Whether that is the right strategy remains to be seen. The fact is that many consumer and retail stocks in North America are struggling this year. The best example is probably the legendary sports brand Nike, which is currently trading at a 12-year low. Investors should therefore exercise caution with Lululemon. Skepticism toward the stock is currently high. Consequently, only risk-tolerant investors are taking a chance here.

RE Royalties: 10% Dividend Yield and Potential for a Takeover

High dividend yields often tempt investors to buy in. However, they are usually a sign that investors are steering clear of a stock. After all, these high yields are often based on analyst estimates. But the market does not always factor in the risks.

The situation is quite different with RE Royalties. With this Canadian company, investors can currently reap an annual dividend of CAD 0.04 per share—representing more than 10% of the current share price. Yet this has nothing to do with future estimates or operational problems. In this respect, RE Royalties is a true dividend gem on the international stock market.

The Canadian company has applied the royalty model from the oil and mining sectors to the renewable energy sector and is investing heavily in solar and wind farms, battery storage, and hydropower. To date, more than 130 individual projects have been financed; in return, the company receives royalties, thereby securing its share of the projects' revenues—often for decades. As a result, the increase in revenue in the second quarter is primarily attributable to the commissioning of newer solar and energy storage portfolios in North America, as well as revenue from wind farms. In the first half of the year, RE Royalties also secured additional capital commitments for royalty financing in the battery energy storage sector (BESS) and for solar projects in the US and Canada.

Nevertheless, even management, which holds about a quarter of the company's shares, is not satisfied with the stock's performance. As a result, the company has enlisted PricewaterhouseCoopers to review its strategy. According to RE Royalties, this review includes not only strategic partnerships, co-investments, and the optimization of the capital structure but also the sale of the entire company.

As a result, investors in the stock can count on a high dividend and potentially benefit from a takeover premium. RE Royalties currently has a market capitalization of just CAD 16 million. This low valuation accordingly offers potential.

Eldorado Gold: Next Gold Mine Starts Production

Eldorado Gold's stock has been one of the top performers in the gold sector in recent weeks. Since mid-July, it has surged about 50% to its peak. The Canadian company is now valued at nearly USD 12 billion.

However, the rise was driven not only by the gold price but also by operational performance. Eldorado has given the green light for the Skouries mine on the Chalkidiki Peninsula in northeastern Greece. There, the first ore was crushed in the primary crusher in July. The first concentrate production is scheduled for Q3, with commercial production planned for the fourth quarter of 2026. At full capacity, Eldorado plans to produce approximately 140,000 ounces of gold and 30,000 metric tonnes of copper.

Financially, the company delivered a solid second quarter. Revenue rose 8% year-over-year to USD 487.5 million. Adjusted net income climbed disproportionately by 51.7% to USD 136.7 million. Significant production declines were offset by the high gold price. The balance sheet looks very solid despite the high level of investment. As of the end of the quarter in June, Eldorado had cash and cash equivalents totaling USD 554.6 million.

In addition to the new mine in Greece, investors should also keep an eye on the McIlvenna Bay project in the Canadian province of Saskatchewan. The company acquired this deposit in April 2026 as part of its acquisition of Foran Mining. Copper concentrates have already been produced there. Eldorado is planning for a mine life of 18 years. In addition to zinc and copper, this VMS deposit also contains gold and silver. Due to the strong continuity of the ore body, Eldorado is already evaluating an expansion of mill capacity from 4,900 metric tonnes to approximately 7,000 metric tonnes of ore per day.

With production starting at Skouries and McIlvenna Bay, Eldorado's profile is shifting from a purely precious-metals producer to a diversified mining group. This may not suit every investor, but a broader portfolio generally reduces risk.

With Lululemon, risk-conscious investors can bet on a turnaround and follow in the footsteps of celebrity investor Burry. RE Royalties is a dividend play currently yielding 10%. Eldorado Gold is gradually transforming into a diversified mining group. However, the recent rally makes it wise to wait and see.