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Sibanye-Stillwater: Its Value Drivers Are Aligned Again

Apr. 01, 2022 3:02 PM ETSibanye Stillwater Limited (SBSW)SBYSF7 Comments


  • Sibanye could fill a critical void with its PGM segment.
  • The macroeconomic environment could see metals and minerals trade at high values for the foreseeable future.
  • The firm's FCF per share is attractive and spells dividend sustainability.
  • The CAPM model suggests that Sibanye could outperform the market.
  • Unions remain a concern despite recent agreements.

hand holding silver stones, silver ore. Gemstone mining concept

RHJ/iStock via Getty Images

In our previous article, we spoke of Sibanye Stillwater Limited's (NYSE:NYSE:SBSW) risk-return profile. Although a few of our concerns have manifested themselves, we've conceded that the sanctions on Russia and a variety of other factors

This article was written by

Steve Booyens author's Pearl Gray Equity and Research's articles. Steve is an emerging markets specialist with experience at firms in London and South Africa. He holds an MSc in Economics & Finance, has successfully completed CFA Levels 1 & 2, and is working towards his Ph.D. 

Steve leads the investing group The Factor Investing Hub where he identifies emerging market investments and provides quantitative research. Features include: model portfolios with holdings across global markets, weekly coverage of underfollowed emerging market assets with an emphasis on GARP and dividends, earnings coverage, insider trade alerts, live chat and investment feedback on-demand. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of SBSW either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (7)

$48/68 per month for total company wide employees is between $18/25mm. Disruption from labor unrest is an issue, but the increased costs are easily managed. Gold production and margins are in decline, and likely will maintain the trend. Their PGM operations are excellent, and underlying prices will likely rise when auto production increases. A great base business, and management vision to be investing in battery metals, and dividends.
Russia supplied about 37% of the world's palladium in 2021. Before Russia marched into Ukraine, the price of palladium was around $2,300 per oz. After Russia marched into Ukraine, the price shot up and was briefly over $3,000 per oz. It has now settled back to around $2,300.

The fact is that there are no direct sanctions on palladium from Russia by NATO countries. Some disruption, maybe, from the financial sanctions imposed on Russia, but no sanctions on the metal. Some feared Russia might withhold the supply as a threat to the West, but Russia is now in such bad shape that they could not afford to do that. If NATO did impose sanctions, there are Asian countries, specifically China and India that would be happy to take the supplies.
"but Russia is now in such bad shape"
Could you please quantify this comment.
It appears to me that as long as Russia has what the World needs then there is a market.
If the US wanted to destroy Russia's cash flow they would immediately stop the war on fossil fuels which is rife in all parts of the this Administration.
Even a hint of a change in direction would knock $20 off of the price of a bbl of oil.
@Andy D.
On TV they are saying Russian GDP will be down 12-18% this year, setting them back 10 years economically.

Then there are the headlines:

A) "Russia says it received $3.6 billion less [38% less] than it forecast from March oil and gas sales, suggesting the Ukraine war and Western sanctions hit exports"


B) "Additional cracks showing in Russian energy complex - refineries cutting runs"


And my friend Paul Krugman says in the NYT: "Vladimir Putin’s invasion of Ukraine was, first and foremost, a crime — indeed, the war crimes continue as you read this. But it was also a blunder. In less than five weeks Putin has destroyed Russia’s military reputation, battered his nation’s economy and strengthened the democratic alliances he hoped to undermine."

First and foremost I am not PRO Russia or Putin!.
I am ANTI WAR and the destruction and death which it brings.
I am cynical about news reports from our monolithic MSM.
For example, Lithuania is inconsequential and imports very little of its energy requirements from Russia. Indeed, Lithuania actually exports power to the outlying Russian "province" of Kalingrad from its imports from Sweden.
I think the current situation could have been avoided and the long term impact will be a greater polarization between East and West to the detriment of the US.
BTW, Biden took great pleasure a few weeks ago at the devaluation of Rouble but it has subsequently recovered its value to pre- invasion levels.
The whole thing makes me sad.
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