Sylvania Platinum - SLP - general discussion
Following Paul's idea of individual thread heres one on a Stocko favourite that has many positives, but what is its true value.
Positives
- Stalwart of the Jim Slater screen for a few years, just recently fell off (EPS only 14.4 instead of > 15)
- PER miserly 3.3
- Market Cap £275m
- Dividend 4%+
- Cash Balance of £72 m (quarter of the market Cap is cash.
- Both House Broker and Simon Thompson have price target of near 200p
Negatives
- Volatile, dependent on price of PGM, but expected shortage of Rhodium should help
- Located in South Africa, but recent unrest did not affect them
They are a hefty 26% of my portfolio and I would like to reduce the holding down to around 10%, hope to retire within 9 months, and too volatile for a good night sleep once I eventually decide to stop working, I can keep going for a few years, so no rush, but currently down to 97p from a recent high of 143p.
What are the rest of the community thoughts, where does true value lie? Everything says hold and forget, but what am I missing?
Be kind to all.
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75 comments
32% of my shareholdings are in SLP, but I started buying in at 42p so I am well in profit. In retrospect. I should have sold at £1.30, but I am happy to hold, as I am confident that price will eventually catch up with value. In a years time if further upsets are avoided, metals may well be in greater demand and the dividends and book value will shine through to make broker estimates of £1.50 to £1.75 a real possibility. If there was another company with these fundamentals at this price, I would certainly be interested in buying. Because of SLP 's holding % in my portfolio, I must hold off increasing my involvement even at these prices right now.
Even with the recent pull back in price it has been a good start to the year for £SLP
The average price for PGM metals in January
PT $1,000 now $1,100 ish
PD $2,000. now $2,900 plus
RH $16,500 now $19,500 plus
PGMs have been volatile but mostly to the upside
http://www.platinum.matthey.com/prices/price-tables#
Sylvania Platinum (LON:SLP) price is tracking the price of Rhodium. I think the current fundamentals are just being ignored by the market.
Share price has done much since November, -31% down from 52 week high, yet Tharisa (LON:THS) is at a 52 week high, I don’t understand the difference in share performance between these 2.
Over the longer term Tharisa (LON:THS) SP has dragged compared with Sylvania Platinum (LON:SLP) for no clear reason. The question more often asked has been why is Tharisa not moving up in the same way as SLP. It's just swings and roundabouts. No special reason.
I think both companies represent good coffee can holdings ... although not without risk.
I do hold both. The eps forecasts are better for Tharisa (LON:THS), is that because of £SLP's greater exposure to Rhodium? Rhodium prices have been rising recently, which should bode well for £SLP.
note on Reuters site today …
The World Platinum Investment Council (WPIC) said on Wednesday the global platinum market would see a much larger surplus this year than it previously forecast and another big oversupply in 2022.
https://www.reuters.com/market...
The full report from WPIC can be read here…
https://platinuminvestment.com...
Noted ... but in Sept. '21 Sylvania Platinum (LON:SLP) reported that c.60% of its revenue comes from sales of Rhodium, 17% from Palladium. Platinum is a relatively small contributor. I'm not sure what proportion of SLP's PGM basket price is made up by Platinum. But it's not a critical determinant of the company's performance.
Anyone else starting to get slightly frustrated with this stock? I've held since the start of the year and didn't sell any when it reached it's peak. Now I'm down over 15%. It's down 7% this week already!
Don't think there is any denying the companies fantastic fundamentals but there must be a reason why the market doesn't like it. Any ideas?
The margins are far off what they were previously. The chip shortage is denting auto-manufacturing and therefore PGM demand. I have trimmed a bit at 106 or so. Disappointing to sell so far below recent highs, but I wasn't happy holding an outsized position.
When auto-manufacturing picks up it will be interesting to see what happens with Rhodium and Palladium. SLP dependent on the price of both. If they rebound then SLP may look very cheap
Thanks for the information. Hopefully PGM prices start picking up soon.
I can't afford to average down anymore this stock is already very overweight in my portfolio, dragging everything down with it!
Happy with my other holdings so I think I'm gonna ride the wave for now. Fingers crossed
Definitely. It looks like SLP should be flying higher but market sentiment is practically zero.
Current share price is practically the book price now (when receivables are added in). So the actual future opportunity is rated as zero. That cannot be right
Interesting diversion between the price of platinum and the price of Sylvania Platinum (LON:SLP) (I hold) over the last few days of trading. Platinum is up approximately 7% in the last 5 days of trading but Sylvania Platinum (LON:SLP) is down by about the same amount 7%. Unless platinum makes a significant U-turn then one might expect Sylvania Platinum (LON:SLP) to follow suit.
If you like plotting on the charts then 100p is possibly a good buying price in my opinion.
Before stockopedia when I had only a handful of good stocks to choose from, I would have held onto SLP for much longer but I sold recently at profit and dividend and bought into Serabi Gold (LON:SRB) and Griffin Mining (LON:GFM) . I have countless stocks to pick from now that I no longer have that "fear of missing out" and its helped my trading considerably because its made me better at waiting for the right time to enter.
I'll buy back into SLP when it breaks out of its current base that it is currently languishing. No point waiting in dead money while it's doing nothing. Even though both SRB and GFM are still trading below its 200 day, and hence has overhead supply(sellers) to contend with, they are both undergoing a stronger trend reversal upwards than SLP, which is struggling a bit it seems. I dont doubt it will go up sooner rather than later and once it breaks out I'll jump back in, but in the meantime I would rather be where the action is, time is money as they say.
Bear in mind that platinum is a minority of revenues
Just a note that SLP has now joined the 90 Stockranks :) . SLP is one of my favorite stocks!
I notice that Tharisa (LON:THS) has been creeping back up and is not far (-11.9%) off it's peak but Sylvania Platinum (LON:SLP) is still well down, any thoughts on this?
Maybe its because of the percentage of shares in free float. For THS this is only 30 percent; SLP is 70 percent. SLP is not far behind chartwise. The difference technically is that after the rally from the botton, SLP is now consolidating i.e profit taking from bottom fishers. As THS is majority instutionally owned(they tend to be long term holders) there was no, or less early profit taking and so the rally from their lows was not interrupted by day traders taking profits.
I'm in SLP(bought when i saw a double bottom), not THS, but from the charts, a golden cross is imminent(as was THS), so once all the profit taking is finished, which I expect to be soon, the trend should resume upwards in a fairly short order back to the previous highs of 150p.
Agree with this. I expect consolidation to bottom out at 103/4. Chart would imply next consolidation will be at around 125p
bought a few here at 95.5p, as it looks like the downtrend may have turned.
The pattern of lower highs and lower lows has been interrupted by a double bottom, and price has broken above the previous lower low and edged over the 50sma, with the 21 ema turning up.
How much momentum this has remains to be seen, but I’m prepared to hold for a while, stop below the lows (red dashed line).
I’d like to see a day candle finishing above 94.5p to confirm a breakout. There was a bit a selling off on Friday. I hold.
Morning BT,
Thought I'd share this weekly of RR as I kinda like it's outlook. Although 40% up in a month I have 'dipped the toe' this morning and will buy more around 125. It's a mammoth turnaround and a bit of long term spinner but I can easily see it getting to at least 250 in the not too distant future.
Do think anyone who is interested in investing in SLP should watch the latest video presentation from the company which you can access on investormeetcompany very informative and professional presentation which should go a long way to answering any concerns or hopes you have for the company
SLP has very definitely broken out of it's weekly ranges. The bottom of the latest decline looks to be in.
I think breaking 104.60 pence is crucial here. Already looking like the bears have slowed down but we need to break out from here to confirm it.
I must admit I'm not reliant on technical charts, 95% fundamentals - but this would make sense in any other chart.
I'm continuing to hold.
The longer term future of Sylvania Platinum (LON:SLP) appears to depend on the use of the PGM metals in generating and storing renewable energy. The short-term future is secured by their use in cleaning up emissions from the internal combustion engine.
I do not know if the PGM metals will figure in any large scale in the renewables sector, I keep looking for clues but what I find does not inspire confidence: see Techmet . I know a corporate investor in Techmet, Mercuria; they will know more than most where the future money is to be made.
The metals of interest are Cobalt, Lithium, Nickel, Rare Earth Metals, Tin, Tungsten, Vanadium: PGM's do not get a mention.
I do remember reading a forecast that by 2030 the biggest source of Rhodium will be recycled catalytic converters from scrapped automobiles.
Will we all look back at 2021 as "peak PGM's"?
Bonitabeach
Disclosure: Nervous holder of Sylvania Platinum (LON:SLP), Tharisa (LON:THS), Jubilee Metals (LON: JLP)
Read the section on green hydrogen PGM demand is linked to the production of hydrogen
https://matthey.com/-/media/fi...
Also places like India will need PGMs in exhausts to try and decrease their appalling air quality
https://www.thehindu.com/news/...
one interesting fact from above article the amount of cars in India Pakistan has increased 4 fold since 2000 and the amount of electricity generated from fossil fuels has trebled from 1998-2017
I keep reading in the comments how Sylvania Platinum's price is correlated to the price of PGMs. That might be true in the short term, but not necessarily in the long term. At the current evaluation, Sylvania's PE will plunge to less than 3 in a year time. That means that an investor could buy the whole company, repay it in 3 years with its own earnings and then keep it for free, forever. That is just nuts.
There's technical bounces going on in Sylvania Platinum (LON:SLP) +3.62% (on my monitor).
That's a heck of a day swing. People are playing games, making and losing money.
I totally understand Wilkonz's logic.
"Back orders for cars are sky high (I have a car on order and it will take 9 months). "
This is annoying, as it means people have to keep older cars running longer, dodge one more service annual hose-down, pass one more MOT.
I'm in a very similar position to UK Investor. My simplistic view is this - the stock price is linked to the metal price which is linked to demand - which, taking the car industry, has dropped - because of the chip shortage - even Toyota who had, so far, ducked this bullet cut production by 40% last week. Back orders for cars are sky high (I have a car on order and it will take 9 months).
In summary, demand for the metal group will come roaring back. I will sit and wait and maybe top up.
In this instance Sylvania Platinum (LON:SLP) Tharisa (LON:THS) Centamin (LON:CEY) and EVRAZ (LON:EVR) whilst I've seen "summer" weakness in my holdings, I am sticking to my investment thesis.
No about turns for me.
I think if the game were up for any of the above, we would be seeing far far lower more violent drops in price. Anyone remember Plus500 (LON:PLUS) plummet a few years ago?
Tharisa (LON:THS) Centamin (LON:CEY) and EVRAZ (LON:EVR) are all up +1.39% +1.74% +2.57% - all dividend paying cash generators.
" so there is something to be said for not having too much in one company."
I think the share price is helping me comply with that idea.
Sylvania Platinum (LON:SLP) at a low of 83.3p today down 2.4%.
My holding is -30% now... there would be annoyance but I'm within 2% of lifetime peak value elsewhere.
The only regret for me is Stockopedia has down scored Sylvania Platinum (LON:SLP) to SR 85 (for now) and I am principally investing on an StockRank basis.
But the stock rank has dropped steadily from 99 to 85, also one of my principle indicators, and the steady drop caused me to off load 2/3 of holding. The drop today is now hardly noticeable on PF, so there is something to be said for not having too much in one company.
It will go back I believe, not sure when and have a couple other stocks I want to buy.
The momentum score is partly technical though, driven by price movements.
It is "based on a blend of price momentum (52 week highs, relative strength) and earnings momentum (recommendation upgrades, earnings upgrades and earnings surprise) factors"
The fundamentals still look good to me.
The demographics are interesting, but probably already factored into the Sylvania Platinum (LON:SLP) price. As are the commodity futures. In early 2018, I bought Sylvania Platinum (LON:SLP) on the fundamentals and now I've recently sold on the TA picture. I'm certainly not averse to buying back SLP, but I'd want a huge margin of safety and strong evidence of a recovery in the price of metals. So my target price is in the 50-60 pence range.
Each to their own my friend seems we will have to agree to disagree think the cash on balance sheet is your margin of safety
Like yourself I first bought a few years back let’s wait for results new JMAT report and how things pan out over next year personally think your price target is on the low side longer term short term in a big sell off who knows could be 50-60 I would be a big buyer at those prices
I'd want a huge margin of safety and strong evidence of a recovery in the price of metals. So my target price is in the 50-60 pence range.
I'd think it pretty unlikely you would be able to buy back in at 50-60 given strong evidence of a recover in metal prices. But you may be succesful.
Unlikely, I agree. It might bottom out at 75 or 80. But given its recent volatility, I'd want a decent margin of safety. Alternatively, once the price rises above the 200 day MA (around 100 pence) and stays there, it could again become a tempting proposition. A lot depends on what's happening in the rest of the metal and mining industry.
The prices of Palladium and Platinum have fallen around 25% since May 3rd. There are several reasons for this, including the faltering Chinese economy and the slowing of automobile production because of semiconductor shortages. Until the prices of these metals, and Rhodium (down 50%), recover, the price of Sylvania Platinum (LON:SLP) will continue to plummet. In the long term, the soaring popularity of Electric Vehicles will reduce the demand for catalytic converters which use Palladium, Platinum and Rhodium. The fundamentals of Sylvania Platinum (LON:SLP) reflect the past, and not the future, and in my opinion are a poor reason for continuing to hold. In terms of probability, the price of Sylvania Platinum (LON:SLP) is move likely to continue to fall, than to make a V shaped recovery. I might be wrong. And for the sake of those who continue to hold Sylvania Platinum (LON:SLP) I hope I am wrong. But as the old adage goes, cut your losers and run your winners.
While I agree that the price of SLP is obviously linked to the price of the PGM group metals and the effect that chip shortages have had on short term demand from the car industry which as I have said before after a chat with someone who works in the industry that it looks will continue till January your assertion that the demand for rhodium will plummet due to the demand for electric vehicles is way off the mark at least in the next 5 years plus in UK and the west and a lot longer in emerging markets where growth in car ownership will be highest like I have said before If I am looking for information on demand for PGM metals I will look to Johnson Mattheys reports there should be another one out soon which will make interesting reading in Mays report it had palladium and rhodium still in deficit and will be in high demand because of regulations pushing higher air quality the long term market for platinum demand will without doubt be the production of green hydrogen
When it comes to ruthenium and iridium these are not related to the car market in the same way and their demand is more in specialist areas in the industrial sector
One more point when it comes to electric/hybrid cars it is by no means sure that hybrid cars wont be around for a longer period which will of course need PGM metals
I hope you're right about the prices of the PGMs. But even if the demand for PGMs does increase once the semi-conductor problem is sorted out, the decline of the internal combustion engine has begun. The rate of decline is uncertain, but probably faster than many of us anticipate. This has implications for all the commodities associated specifically with the internal combustion engine, such as oil and PGMs. My personal guess is that the beneficiaries will be copper and nickel producers. (Electric vehicles contain about three times as much copper as ICE vehicles.)
We all know that the commodity markets are notoriously hard to predict, and that commodity prices can, at times, defy logic. One thing on which we can all be agreed is that metals and mining are currently in sharp decline. At the most optimistic, it's likely to be 3-6 months before we start to see a turnaround. Until then, mining and metal prices may well continue to fall. My plan is to wait for the market to bottom out, at which point there should be some excellent buying opportunities, including, perhaps, Sylvania Platinum (LON:SLP) .
seems we agree on a couple of long term trends I also see copper and nickel etc benefitting long term from the move towards the electrification of the economy in the west and developed world
But the majority of people 80-90% don’t live in that world and for them fossil fuels will be the fuel of choice personally I think there are still opportunity’s in PGM and oil company’s though I think politically the western majors will find it difficult to develop new fields or even run the ones they already run
Like I said in my previous comment PGMs are not a one trick pony reliant on the car industry longer term though short term you are correct the fall in price of rhodium and palladium will cause a fall in SLP earnings a third of its market cap is cash and it will still be throwing off more cash with PGM at present prices
Think one thing to remember with all commodity prices is that the population of the world will increase by 80 million this year and world population will increase by 2bn over the next 30 years to nearly 10bn in 2050 that’s a lot of people looking for a better life each and every year
In short in a years time I think SLP will be higher than were it is now we’re the price ends up next month or month after I don’t know but a rebound will come for commodities including PGMs
Punctuation, man!
I’m dyslexic so never going to be good I’m afraid
Interesting read and useful context - thanks Bullhead.
I just don't understand the current market cap of £245m as of today with a SP of 89p. Cash balance is huge in this company so I understand the concerns around downward trend but the more SLP continue to operate at current levels, the cash balance will keep building up and the market has to increase along with it. No brainer
The market does not have to do anything logical. This has been a great share for me, but after watching if slip from 140 down to 88 today, I have off loaded 60% of my holdings. This now leaves SLP at only 10% of my portfolio and allows me to sleep easier at night.
I have held Sylvania Platinum (LON:SLP) since March 2020 and have topped up 4 times.
I follow John Rosier and in his interview with Tamzin on PI World on 15th July he said "worth a lot more" and felt a PE of 4 was backed up with a Dividend of 5.5%, highly cash generative and Dividend likely to be declared August or at Results on 6th Sept.
He also said this share was "a market makers dream" which I found interesting.
I would welcome any comments on this last point.
Great company but i sold in July as i am worried about the geo-political risks with South Africa.Those risks have always been there but they have been escalating this year.
Thanks for your post GB it brought up a couple of thoughts for me one being risk averse different people are and long/short term attitudes to holding stocks
SLP makes up around 10% of my portfolio my largest holding is CAML and although the rebound from lockdown has been slower than many including myself hoped the long term trends that made me buy SLP a few years back continue going back to the last report from JM it still has PD,RH in a supply deficit for this year and high demand for IR and RU the nest report from JM which should be out soon will make interesting reading
One more point on longer term demand for PGMs is green hydrogen and its production which will be a big driver for future demand it’s well worth reading the MayJM report just for that part of it
SLP is a volatile stock and is not for everyone personally I will hold collect my divis and look to the rebound when car production increases as a side point I spent the day with a friend at his house with the kids recently his business is involved in testing for some of the large car manufacturers and he doesn’t see the chip shortage ending before January
Sorry to ramble on I tend to trade longer term as I sleep better and I’m better at it but for short term traders Chartists may look at SLP differently
Let’s hope we are all successful in our long term goals
GloucesterBob funny seeing your comments I bought some yesterday and saw your comments market close tuesday. Have been watching for a while and could not resist with the current price Cheers
@GloucesterBob, you must have big cojones to have a quarter of portfolio in a single African small cap mining stock, just months from retirement. Best of Luck!
Thank you however, if it wasn't for Sylvania Platinum (LON:SLP) I probably wouldn't be in a position to retire early, but yes need to reduce the volatility of the portfolio, but just keep getting the feeling if I sell now, I will live to regret it within months, decisions, decisions, decisions.
I am in a similar position with £TSLA Bob, I've generally held all the way up. I did slice a little bit earlier in the year and rebalanced elsewhere to help me sleep better at night but it still makes up nearly 25% of my weighting. Unless the story has fundamentally changed (ie. demand for ICE vehicles), I would be inclined to stick rather than twist.
I understand the feeling, if I hold, there will be trouble if I sell it will probably double. (see link below. )
https://www.stockopedia.com/co...
In the end, I sold a significant amount between 130-140p and reinvested in Tharisa (LON:THS) to keep the exposure to Rh high prices protect against the downside risk. (see link below.).
https://www.stockopedia.com/co...
Good luck with the investment and retirement, I hope it works out well for you.
BSV
Scary how closely the graph follows the Rhodium price.
Here overlayed the Physical Rhodium.
I continue to hold from £116
the company's cashflow is geared to the Rh price so the shares have derated as the SP and Rh have moved up in close alignment. I got twitchy sitting on big profits so halved stake but definitely hanging on as Sylvania Platinum (LON:SLP) is still a bargain if Rh prices can hold above $15000
The graph, share prices being in cents, confused me. Top whack in pence was around 143 pence on May 10th, really I should have top-sliced the Sylvania Platinum (LON:SLP) holding in my ISA considering there won't be a dividend payout until next April.
Hindsight would have made us all rich Silver ....
I have two set of rules,
I should have sold all at 114p, however it still met all my criteria, so held. It dropped out of my criteria about a week later - doh! at which time, just couldn't hit the sell button
Don't we get a divi end Nov/Dec. April was the one off "metals" dividend, nice if we get another of those.
Ever in two minds, I've just sold half of my holding and will see what happens to the remaining half!
like you, Bob, I am heavily overweight on SLP.
I have some buy orders set up because I can’t ignore the value.
I am concerned about the Rhodium and Palladium prices, especially with the chip shortage affecting autos manufacturing in the near term.
I also think, and this is not an expert opinion by any means, that the chip shortage will pass and the autos market will be strong as part of the general economic recovery and stimulus programmes.
I also hold some JLP and THS. These have the same metals exposure (or at least overlapping), but carry slightly different opportunities and risks compared to SLP.
Ultimately I don’t want any position to occupy over 10% of my portfolio, and probably less than that in the long term. Just can’t sell now when in my view the shares are looking so cheap.
Then again, trends tend to continue, and the share price trend is definitely downwards, so I have to admin I don’t know where this share is going short term.
The results in Sept will be important. How they use the enormous pile of cash they have been accruing will be my main focus, along with the guidance for the next FY.
If they don’t communicate a plan to use that cash, either by capital expenditure or shareholder returns, I myself will be a little frustrated, and so may other holders
I see the current price as an excellent buying opportunity.
I sold off half my holding a couple of weeks ago and I've just sold the rest today. It's been a good run with >200% profit over the last 3 years, and I'll be sorry to let them go, but one cannot ignore the downtrend ( or the ominous chart pattern of head and shoulders / double top). The price has now dipped below the 200 day MA. I've decided to bank the profits and move on.
I too decided to sell SLP now that it's stayed below 200d MA for a few trading sessions - both to take a modest gain (I am newer to SLP than yourself) and preserve capital. The chart doesn't look good, momentum is dwindling and RSI has been trending downwards since May. It needs to close above the long term downtrend line for me to consider looking at this again.
I agree: It needs to close above the long term downtrend line for me to consider looking at this again. Sylvania Platinum (LON:SLP) is a good company and is probably undervalued at 98 pence, and I'm prepared to buy back once the price stabilises. But it's much easier to make rational decisions as a non-holder. This could easily dip to 90 pence or even 85 pence before going up again.
I agree Wilkonz, now is not yet the time to buy back into Sylvania Platinum (LON:SLP) and I believe it has more downside. Having bought the share just over 2 years ago, I sold out on my entire holding over a month ago. I would like to get back into Sylvania Platinum (LON:SLP) but several things are preventing me from doing so just yet.
Until the price of certain metals start to rise in price, such as Rhodium, then Sylvania Platinum (LON:SLP) will continue to make lower lows and lower highs.
Although the Stochastic is saying the share price is cheap, the MACD is still falling and the blue line is below the red reference line, indicating that now is not yet the time to buy.
David.
All comes down to the Rh price, which seems to be stabilising at around $19000. Sylvania Platinum (LON:SLP) is still a money printing machine at around this Rh spot price. However, predicting future commodity prices and getting timing right is a mugs game.
Year-End Results on the 6th of Sep announced today.
It's such a great business but the constant overhanging thought of being tied to a commodity price nags at me. Yes there's a shortage, but its a material sued in an ageing industry that won't be around forever so its a holding that needs constant monitoring imo
great result today I am down 10k
Sylvania Platinum (LON:SLP) £32.K down and Tharisa (LON:THS) £12.5K down.
Don't worry. Its going to bounce back and quickly.
Stay cool.
Thanks, well against my better judgement I had invested at 88 and 92. Sold those holdings today at 102 and I have defrayed my losses considerably.