Can do some please tell me what I’m not seeing here, to me SLP is a buy. It has a huge cash pile, no debt, lots of fixed assets and has been extremely well run for years. I have done some number crunching, if you think I’m wrong please tell me it would be a great help for me to improve my analysis . On a basket price of 1441 which is discounted by 33% from what was stated at the annual results to match current prices and a total all in cash cost per ounce of 1007 they still make $434 per ounce.
Given the lower end of production guidance of 72,000 ounces it gives a year net profit £24,500,00 ($31,500,000). Meaning the stock is on a P/E of around 7. Other financial metric of notes from stockopedia that I feel support my view. An ROE of 22 and has remained above 15 for the last 4 years and a ROCE 29 and has also remained above 15 for the last 4 years. To me this shows that they are very prudent and successful investors in the business and if they can maintain a this even in the bad times like now when the prices are lower then when there is even the slightest relating it could be very good for its growth from here. It operating margins are very good at 52%. Finally it’s is paying a dividend yield of 6% forward according to stockopedia and 11 according to Hargreaves lansdown.
To me it a buying opportunity as metal prices will suffer over the course of the recession but once it is done and production would be Naturally slowed in places as it would be uneconomical at these prices could we see a rally and in turn in the SLP share price. If anyone has any counter points please say as it would be very useful to me
Olly
(A young investor trying to make as few mistakes as possible)
