Slp Going Down (Mar) Why The Share Price Is Falling? >> The guide shares everything that investors want to know about the price decline in the shares.
Sylvania Platinum is the renowned and famous metal producer in South Africa. The metal producer is in the news these days after its share price has declined by 15% in the last quarter. The company confirms that the profit has fallen by 64% in the last quarter.
Investors from the Philippines are worried about the declined share price of SLP. The investors are taking this slight price decline into the penny stock territory as the share price of SLP has gone below 100p.
There are many reasons why Slp Going Down, and forecasters suggest that the shares can be traded at four-time earnings.
What is Sylvania Platinum?
Sylvania Platinum is the low cost producer of metals, including platinum. The PGM mining company has the vision to become the leader in mid-tier and lower unit costs.
The company focuses on generating wealth for all stakeholders worldwide, including the Philippines using innovative and safe processes to aim at PGMs. Besides, the company also focuses on exploiting the other value-added associated minerals and metals.
Why is Slp Going Down in Share Prices?
As mentioned, the mining company is focused on producing platinum and other value-added minerals and metals using waste materials from the client mines. Unfortunately, the company shows a net profit fall of 64% in the yearly financial report, i.e., $14.7 million in the fourth quarter of the fiscal year 2020-21. It is down by $41.3 million in first third quarter.
The profit and share price have declined because the price of Rhodium has increased to its all-time high in April-May, and again it has fallen significantly since then.
The second reason for Slp Going Down is that the production of platinum group metals has fallen by 6.5% to 16 289 ounces in the last quarter. But, again, it is because of the decline in the quality of feed it has been getting. As a result, the company is getting fewer PGMs from each production of ores.
There are fewer PGM ounces and higher costs for production, leading to a decline in the profit levels and share prices.
Is This a Temporary Setback?
The share price of SLP is also going down because of the dual whammy – the higher operating cost of the company and lower selling price of the ores and commodities. However, Slp Going Down is a temporary setback because Sylvania is considered a low-cost producer with higher profits.
Another interesting fact is that most of the forecasters believe that the PGM market is undersupplied. It means that the primary source of demand is in the automotive industry, as PGM and other metals are increasingly used in catalytic converters.
The car production processes will setback when there is a shortage of semiconductor chips, and as per sources, the situation will never improvise until next year, and it is not sure when it will improve.
Is It The Right Time to Buy SLP Shares?
Despite Slp Going Down, investors consider buying SLP stocks as it is a good business with desirable characteristics. But, the share market results show how the external factors can boast a significant impact on profit margins.
The feed quality of SLP is not likely to enhance this year, and it may restrict production growth and may cause sustained months of higher costs. Based on the recent price decline, the shares are trading at less than 5-times profits of 2020-21. However, it is cheap, and the stock is likely to have a dividend-yielding of more than five times.
Conclusion
Investors are concerned after Slp Going Down and its share price registered a decline last week. However, it seems to be a temporary setback and nothing to worry about. Nevertheless, investors need to wait for some time until it recovers.
Do you want to add something about SLP or Sylvania Platinum and its shares? Please write it down in the comment section.
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