In a research note BB&T analyst Garrett Nelson called Stillwater Mining an attractive takeover target. Nelson cited a favorable cash position, geopolitical footprint, and an improving cost curve. The analyst noted that Stillwater Mining management is confident it will reach its cost-cutting goal of $100 an ounce in the next 18 months.
TheStreet Ratings team rates STILLWATER MINING CO as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate STILLWATER MINING CO (SWC) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 6.20, which clearly demonstrates the ability to cover short-term cash needs.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 68.76% over the past year, a rise that has exceeded that of the S&P 500 Index. Although SWC had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- STILLWATER MINING CO has improved earnings per share by 25.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, STILLWATER MINING CO swung to a loss, reporting -$2.26 versus $0.46 in the prior year. This year, the market expects an improvement in earnings ($0.57 versus -$2.26).
- The gross profit margin for STILLWATER MINING CO is rather low; currently it is at 23.19%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 8.91% trails that of the industry average.
- Net operating cash flow has significantly decreased to $4.77 million or 69.26% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: SWC Ratings Report