£SLP price move

20th Feb '20 by Cairo

15 comments 847 reads

Hi. Im quite new to the site and investing. I tend to do more reading on the site than posting but the site community give me great ideas on investing and I learn alot. Thank you!

Ive followed Sylvania Platinum (LON:SLP) for a while and took the plunge at 36p back end of October. Currently up 80%. I did my own research and was happy to purchase. I always try to work out why a share moves up or down.

What are your thoughts on why the price has moved higher, especially in the last week.

And also can anyone define in simple terms what a Price Monitoring Extension is?

Unlock with Email

Unlock with Google

Already have an account?
Login here

About the Author

Cairo

Premium Member

15 comments

Robert W

20th Feb '20

The price move in my mind is more people recognising how cheap this share looks, especially triggered by the large upgrade in forecast following H1 results. Also Simon Thompson at IC has been recommending for some time. They still look very cheap on a forecast view for this year - 3.69!!!!

RustySpanner

20th Feb '20

I made 20% in a week following the IC recommendation and a lot of research. I set a stop loss which was triggered today as the SP dipped. However, I can't find anything that has changed so I've risked another buy. Fingers crossed I won't regret that, but stop loss set just in case!

Rusty2

20th Feb '20

Actually they did dip down to 33p in October and then again to 36p in February, 2020. They are up about 60% in 2 weeks.

https://aim-watch.com/articles/price-monitoring-extensions-explained/

GloucesterBob

20th Feb '20

The Jim Slater screen through this up for me, the question I have is why the Slater Peg moved from 0.33 to 0.059 overnight this week. Lower peg sounds good, but is it and anyone know why the sudden drop.

Long may the upward trend continue, interesting most days they are up 10% and towards the end work down to 2 or 3%, if that continues, I'm retiring years earlier than planned, :-)

Rusty2

20th Feb '20

This is surely is to do with the revised EPS growth forecasts, Slater PEG is different from other PEGs as it uses both forecast rolling PE ratio and forecast eps growth rates, so I can see how it has changed so much. Not sure if this share price can continue much longer, I have sold part of my holding. The US market is down quite a bit today so we will see what happens tomorrow.

Cairo

20th Feb '20

Thanks for your thoughts and link re price monitoring extension; appreciated. I topsliced earlier today and have a stop loss in place. I also feel price will drop off a bit but happy to be wrong

GloucesterBob

20th Feb '20

Interested to know why you and herbie47 decided to sell some of your holdings.

All the data from Stocko appears to show this has further to run, its a sea of green, no debt, cash generative, something is driving the price big time.

Not a criticism in any way, just trying to work out why people sell, which may influence my decisions in the future

William K

21st Feb '20

I agree Robert. ST has been promoting Sylvania Platinum (LON:SLP) for over a year and his article in IC of 14th February suggests that the company is still undervalued. The current price is on a parabola and may well drop back to around 50 pence before consolidating at which time they would be a good buy, with a target price maybe as high as 100 pence over the next 12 months.

robin penfold

21st Feb '20

This share remains a strong buy (or hold if u r already in as I am). The reality is the SP firstly got a big boost from Simon Thompson in IC, then the 1st half results were excellent and then the house broker raised its forecasts to 110p and forecast a material increase in Earnings and a Dividend to approx. 10% and 20% yield for yr to June 2020 and June 2021.

The critical metal to the change in forecasts is Rhodium (then Palladium and finally Platinum). Rhodium only accounts for approximately 12.5% of projected total 4PGM production (74k to 76k oz) but its Price has gone from Company Budget price in Sept 2019 of $3,585 per ounce to $11,000 bid to $12,200 offer this morning (source Kitco). In H2 to June 2020, by my calculations if SLP produces 4,940 oz and u assume $8,100 average price this will add an additional $22m to EBITDA (again using my Janet and John math). Cut a long story short and SLP could make FY EBITDA of $90m v original forecast around Sept 2019 of $37.5m. (Plenty of room for error in this estimate)

Will the above be achievable? The key is the price of the 3 metals and Rhodium and Palladium in particular staying elevated. Strong demand is expected due to new emission regulations (China /Europe) and its use in the autocatalyst market, resulting in an annual deficit of both Rhodium and Palladium for the next few years.

If $90m is achieved and the commodity price outlook stays around current levels for 2020/2021 FY, then the SP at current levels will look v. attractive / cheap and likely to move strongly higher.

RustySpanner

21st Feb '20

And the SP is climbing back up :)

abtan

21st Feb '20

I held Sylvania Platinum (LON:SLP) until relatively recently (before the recent update) and continue to remain out.

As per most posts here, the financials are compelling and are what drove me to buy in the first place. If 2020H2 is a repeat of 2020H1 then this share looks remarkably cheap.

The FY EBITDA estimate of $90m someone mentioned here certainly doesn't look far fetched.

So why stay out? Well, a few reasons:

I don't understand the market dynamics behind the continued price increase of the PGM basket. With current events in China, surely demand for these metals will plummet? Supply chain issues in the West aside, note the 92% drop in China car sales reported today.
The directors themselves don't want to change forecasts. Given that things seem to be going so well, I found this really odd. Why not moderately increase forecasts? Is this management being conservative, or fearful?
The "challenges" section of the report added one extra bullet point around a decrease in chrome prices. I don't fully understand what impact this will have on the ability of Sylvania Platinum (LON:SLP) to continue to product 4E PGM's. This year looks like it will probably be fine, but any impact on future years could have a swift impact on the share price.

Given the low cost of production I have no doubt that Sylvania Platinum (LON:SLP) will continue to be around as other players are forced out, but in the short term I will reluctantly wait on the sidelines until the picture is a little clearer.

Rusty2

21st Feb '20

Various reasons why I sold part of my holding included the price has spiked up in the last month, this share is quite volatile, I often sell when a share price spikes up unless there are good reasons for it, often they fall back, especially if it due to a share tip. I don't follow ST anymore, fell out with him over various tips. I still hold my original stake which I bought at 33p, I just sold my top-up at 36p, so I made around 66% in about 2 weeks. I do also have major concerns about what is happening in China, I believe the figures regarding Corona Virus are understated by the chinese authorities. Yes car sales have really plummeted and other car manufacturers could have problems making cars due to lack of parts. In this market I'm more inclined to sell, I think there will be a correction soon, so I'm going more into cash and gold. Directors are being quite cautious also as Abtan states. Mining is not really a sector I invest in, but I do buy the odd one.

Robert W

21st Feb '20

Some interesting info on PGM from the latest Anglo American update: https://www.stockopedia.com/share-prices/anglo-american-LON:AAL/news/anglo-american-plc-anglo-american-preliminary-results-2019-urn:newsml:reuters.com:20200220:nRST5279Da

abtan

21st Feb '20

Hi Robert

Was there anything in particular in the report? The only point I could see on the future of PGM was with regards to a risk in future demand.

Cairo

21st Feb '20

I wish my answer was more considered than the others on why they sold :)

My answer is simply that I wanted to topslice and lock in some profit on the basis of being a new investor. I do research and spend time reading on here but was torn between;
1. “I am new to this” so will no doubt make some errors and them thinking noone got poor taking a profit; and 2. “Let you winners run”.

Think I am understanding the basics and theory. I just have to get the experience and then the mindset :)

Thanks again for all responses!

Unlock the metrics for all these stocks and more...

Take a free trial

Facebook Twitter Youtube Instagram RSS

This site cannot substitute for professional investment advice or independent factual verification. To use it, you must accept our Terms of Use, Privacy and Disclaimer policies.

Unlock the metrics for all these stocks and more...

Take a free trial

£SLP price move

Unlock the rest of this article with a 14 day trial

About the Author

Cairo

15 comments

Unlock the metrics for all these stocks and more...

Unlock the metrics for all these stocks and more...