The Montana-based mining company has successfully refocused its strategy, analysts said.
"Primarily as a result of three expansion projects currently under way, as well as company-specific cost cutting initiatives, we estimate Stillwater has the potential to increase annual PGM (77% palladium, 23% platinum) volume by ~18% while reducing all-in sustaining costs by ~10% from 2014-2018," analysts said.
"After a three-year period during which Stillwater attempted to aggressively grow via acquisitions or expansions, a new senior management team at Stillwater has refocused the strategy back toward expanding the Montana asset base and controlling unit costs," analysts added.
Shares of Stillwater closed down 0.3% at $13.13 yesterday.
Separately, 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 increase in stock price during the past year, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 109.0% when compared to the same quarter one year prior, rising from -$201.50 million to $18.15 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Metals & Mining industry and the overall market, STILLWATER MINING CO's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- SWC, with its decline in revenue, underperformed when compared the industry average of 2.6%. Since the same quarter one year prior, revenues slightly dropped by 10.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for STILLWATER MINING CO is rather low; currently it is at 21.79%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.20% trails the industry average.
- You can view the full analysis from the report here: SWC Ratings Report