Sibanye Stillwater Ltd. A value story. - November 22, 2023

(SBSW, NYSE)

• Today's chart if a five-year, weekly chart of Sibanye-Stillwater. SBSW is a multinational mining and metals processing Group with a diverse portfolio of mining and processing operations and projects and investments across five continents including two of the largest platinum mines globally.  

• The company's focus on platinum group metals recycling and expansion into "green metals" positions it well for long-term growth. 

• A good 75% of total SBSW production cost is below current metals prices and they have only 25% debt to equity and 1/3 of market cap in cash. 

• SBSW's is profitable and currently trading at roughly 5X consensus earnings at depressed platinum prices, with a 15.2% Return on Equity, is valued below Tangible Book Value and has a long history of paying large dividends (>7% trailing 12 months). 

• These numbers are much lower than the five-year average and previous bottoms. 

• While platinum is used in jewelry, its main use is in catalytic converters for cars, trucks and buses.  

• Looking at rather clear supply and demand structures for platinum, much like uranium this year, I have a high degree of confidence that there will be an under supply of platinum starting in 2024. 

I am very constructive on the precious metals sector in general and believe that stocks like this will provide the opportunity for large returns over the coming 1-2 years and, when the charts stabilize, will offer exceptional risk reward. On watch for now.

Our Chart of the Day is intended to be a standalone technical chart. We use them to highlight open positions, stocks on our watch list, or indicators that we believe are important, or just interesting at the time. It is not a directional market call. Feel free to share them with others who may be interested.