Sylvania Platinum

Platinum Nugget

Sylvania Platinum Limited primarily engages in the retreatment of platinum group metals (PGM) bearing chrome tailings materials in South Africa and Mauritius. The company produces PGMs, such as platinum, palladium, and rhodium. It holds interests in the Sylvania dump operations that comprise six chrome beneficiation and PGM processing plants, as well as open cast mining and Northern Limb projects. The company was incorporated in 2010 and is based in Hamilton, Bermuda.

VectorVest Chart of Sylvania Platinum
Click or tap image to enlarge

The weekly chart of SLP.L shows price action in candlestick format over the past two years. Although not shown on the chart VectorVest values the stock at 170p while SLP.L closed at 100p on the 13th of October 2021. The share is much undervalued by the market according to the VectorVest valuation model.

In the window just below the price, the blue study shows that forecast Earnings per share (EPS) is rising and this is the engine that’s been driving the share price upwards. Over the past two years forecast EPS has risen from approximately 5p to 25p and it is this ramp upwards in EPS that’s caused the share price to move strongly. There would seem to be much more to come.

On VectorVest, the Relative Safety (known as RS) of the earnings stream is ranked as good. The share pays a generous dividend of over 4% which is well covered by an earnings yield of more five times that amount. The company has an excellent history of paying and growing the dividend yield. VectorVest forecasts that the yield will rise by 21% in the year ahead.

The metric measuring long-term share price appreciation potential in relation to a AAA rated corporate bond (known as RV) is showing an excellent value. RDW.L has a forecast Earnings Growth Rate (GRT) of 39% which VectorVest considers to be excellent.

Technically, SLP.L has pulled back in price since May 2021. This retracement is in line with the fall in the Platinum price. Over the past month the share has found support and charted a double bottom chart pattern at 50% of the upward move from the Covid low to the high of 2021.

In the bottom window of the above chart an 8 week Stochastic is shown. This is a momentum indicator invented by George Lane around 70 years ago. The Stochastic indicator is rising from an oversold position after a strong multiple divergence pattern. Technical analysts regard this as very positive.

In summary, SLP.L looks set to grow earnings strongly and reasonably safely over the next year plus deliver and grow its dividend yield. The share is markedly undervalued and technically has just printed a Buy recommendation on VectorVest.

At present, the advice on VectorVest (shown below) as I write on the morning of the 14th of October is to exercise caution in buying stocks as the overall London market recovers from the most serious pullback since the Covid collapse. It is far from certain that this selloff that started on the 8th of September is over.

The Color Guard is Neutral 13 October 2021
Click or tap image to isolate.

SLP.L has been very kind to the author over the past few years in several very profitable trades. He has taken his first new UK position of this campaign in this share on the morning of the 14th of October based on the analysis above. The VectorVest calculated stop loss is at 92p.

Please note that although the investment is suitable for the author it may not be suitable for you.

 

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3 thoughts on “Sylvania Platinum

  1. David , this is very informative and an excellent article.
    Thanks for taking the time and giving us this insight and opinion.

  2. Very helpful indeed and I too have done very well from SLP over the years, thanks in no small part, to VV and David Paul in particular.

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