Sibanye Stillwater, today, is $8.33. Yes it has run. Does its' current price reflect its' assets and potential?
I will answer that with a resounding NO! SBGL is now the 2nd largest Palladium producer in the world. Palladium futures are now $1864 and on their way to $2000 and beyond. Has the market actually factored into the equation what that means?
How about the fact that rhodium is now $6000 and going to $10,000 and beyond? SBGL is the world's largest rhodium producer. Is that in the price? NO!
After the acquisition of Lonmin, Sibanye Stillwater became the world's largest platinum producer. Brilliant, visionary, disciplined and caring CEO Neal Froneman bought Stillwater at the bottom of the palladium market, and I believe he did the same in platinum with the Lonmin purchase. Platinum is now $900 and also on its' way, in my view, to a price in the thousands. Has the market actually calculated the implications?
There is a remarkable story underlying the inherent, intrinsic value in the platinum group metals (PGMs) that relates to how critical and essential they are to the functioning of the world's civilian and military economies, and their scarcity. Take a look at my ebook or earlier blog posts to read about the details, but in one sentence, the value of the annual production of each of the individual PGMs is tiny, and as such, price moves can and will be explosive. Platinum, for example, has an annual production, including recycling, of only $7 billion.
And how about gold? Sure, gold has moved a bit, but in the scheme of the markets not ALL that much has happened, yet gold, in my view at least, is the only truly "consistent" currency in the world. Consistent? Well, why should a currency be a speculation as to its value? Fiat currencies all erode over time, and the one currency that in fact is not a speculation (contrary what many think), is gold. The explanation is that its' purchasing power parity has been stable throughout history. That is a fact and something that certainly can not be said for ANY fiat currency.
Meanwhile, world gold production including recycling, is only $250 billion which IS small in the context of total world money. SBGL is also a top 5 gold producer.
SBGL is by far my largest holding.