Nuclia Waste

Main Menu

  • Home
  • Gross Margin
  • Forex Rates
  • Liquidity ratios
  • Waiver
  • Capital

Nuclia Waste

Nuclia Waste

  • Home
  • Gross Margin
  • Forex Rates
  • Liquidity ratios
  • Waiver
  • Capital
Liquidity ratios
Home›Liquidity ratios›The sale of workers’ strike actions is exaggerated

The sale of workers’ strike actions is exaggerated

By Ricky Bagby
March 13, 2022
17
0

Sibanye-Stillwater (SBSW) is a diversified metals mining company based in South Africa. The company is known for its exploits in precious metals, as it produces the most platinum group metals in the world. I am bullish on the stock.

Operational delays

Gold mining operations at Sibanye in South Africa came to a halt when workers went on strike after rejecting the company’s proposed wage deal. Unions want a $65 increase in the monthly pay of workers at the company’s gold mine, matching that of Harmony Gold (HMY) case from a year ago. However, Sibanye is only willing to increase wages by $46 per month because he considers the demands of workers and unions unrealistic.

According to the company’s CEO, Neal Froneman, “wage increases above inflation are not sustainable and cannot be considered”. He went on to add that “the strike will jeopardize the sustainability of our gold operations and ultimately their future.”

What’s next for SBSW?

While the recent selloff in valuations is not encouraging, it is important to remember that this is not the first time Sibanye has faced a workers’ strike. In 2019, its Beatrix gold mine was closed for five months for similar reasons, ending in a compromised deal.

Additionally, Sibanye’s gold operations represent just 9.8% of its EBITDA, and higher platinum, palladium and rhodium prices will likely soften any income statement backdrop.

Compared to its industry peers, Sibanye’s stock is still extremely undervalued, with its price-to-earnings and price-to-cash flow ratios trading at 60.31% and 30.72%, respectively. Additionally, the stock has formed a momentum pattern amid rising metal prices and is now trading above its 50-, 100- and 200-day moving averages.

The Taking of Wall Street

As far as Wall Street is concerned, Sibanye has a strong buy consensus rating, based on four buys assigned over the past three months.

Sibanye Stillwater’s average price target of $23.25 implies a 12-month upside potential of 31.36%.

Final Thoughts

Union strikes are not unprecedented in the mining sector. Investors generally assess these types of risks in mining stocks before investing in them. I strongly believe that the decline in Sibanye shares is overdone and will correct itself soon.

Download TipRanks mobile app now

​To find great stock trading ideas at attractive valuations, visit TipRanks Best Stocks to Buy, a recently launched tool that brings together all stock information from TipRanks.

Read the full disclaimer and disclosure

Related posts:

  1. SPAQ Motion – Now or By no means: Denbury Inc. (DEN) and Spartan Acquisition Corp. II (SPRQ) | Zoom Fintech
  2. UAL motion: a rebound might come for United, however it’s nonetheless too dangerous
  3. MarineMax, Quanex Constructing Product Corp, LouisianaPacific Corp, STMicroelectronics and Franklin Electrical Co
  4. India Rankings and Rankings maintains secure outlook for NBFCs for fiscal 22
Tagscash flow
Previous Article

Consumers Warned About Soaring Electricity Bills During ...

Next Article

Aquaroll, BTL International, Chinesport, Chirana Progress, Dynamika ...

Recent Posts

  • PPV [email protected]~ UFC 276 Live Stream | Free
  • Global Strontium Ferrite Market 2022 | Production, Type, Price and Gross Margin to 2029 TDK, DMEGC, Hitachi Metals, JPMF – Designer Women
  • Analysis-Hungary’s forint drop pushes PM Orban to strike deal on EU funds By Reuters
  • Fantasy Baseball Outfield Waiver Wire Pickups: Week 12 (2022)
  • Have we hit rock bottom?

Archives

  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • March 2021
  • February 2021

Categories

  • Capital
  • Forex Rates
  • Gross Margin
  • Liquidity ratios
  • Waiver
  • TERMS AND CONDITIONS
  • PRIVACY AND POLICY