At the start of the year I made the case that we could be in for a strong rally in precious metal prices in light of the US central bank’s about turn on tightening monetary policy (‘A game changer’, 7 January 2019).
In that article, I highlighted Aim-traded Sylvania Platinum (SLP:33p), a cash-rich, fast-growing and low-cost South African producer and developer of platinum group metals (PGMs) platinum, palladium and rhodium, as an obvious beneficiary. The company’s share price is riding highs, having risen by 80 per cent since the start of the year and the holding has now produced a total return of 120 per cent since I first highlighted the potential in my market beating 2018 Bargain Shares portfolio.
The stellar share price performance reflects the surge in palladium and rhodium prices, up 68 per cent and 50 per cent in the past 12 months, respectively, and the profits Sylvania is making in this favourable pricing environment. Indeed, house broker Liberum Capital's forecasts point towards Sylvania lifting full-year pre-tax profit by more than half to $24.7m on revenue of $69m in the 12 months to 30 June 2019.