Why PAL's stock price is down almost 50% compared to one year ago?
A year ago PAL traded at $10-$11 per share with palladium price at only around $375/oz?
Now palladium is trading at $467/oz, but PAL is at only $5.37 per share?????
I cannot dispute the fundamentals that you cite, nor your strong conviction that these stocks will eventually head much higher. Obviously the PGM metals markets are being manipulated as are the gold and silver prices. Therefore, the price movements are UNPREDICTABLE regardless of the underlying fundamentals that should be driving the PGM prices upward. Sooner or later PGM prices will head much higher. But no one knows when or how much lower prices may go before a reversal occurs. SS
There is something I absolutely can not explain. Coal, with supply and demand relatively in balance, and pretty much price elastic, managed to surge to 300% higher in 6 months. PGM metals, platinum and palladium, with a way much worse shortage than coal, and price inelastic, only managed a 35% and 25% gain in the same 6 months?
And while JRCC gained 1500%, PAL and SWC actually manages to lose in the 6 months?
I can't explain it. The fundamentals doesn't explain it. It's a rigged market. You just have to cope with it.
My view on the fundamentals is still correct. There is nothing that can dispute those fundamentals. And it is not just my opinion. If you watch recent Financial Sense inverview, Jeff Christian of CPM group said they tried very hard to see if they missed anything that could be bearish, and could not find anything.
So you previously pounded the table about buying coal. Just how long, and how frequently, have you been pounding the table about buying PAL and SWC, both of which have been heading lower and lower for months. This certainly may be an excellent time to buy each of them. But you must admit that it wasn't a good time when each of them were trading at much higher prices than they are at this time. Need we go back to read your posts when both stocks were trading a much higher prices? SS
It's no longer a good time to buy coal. When I pounded the table to tell people to buy JRCC at $4 few listened. Now I am pounding the table to urge people to sell coal and buy PAL and SWC, again few listened.
The global coal supply/demand imbalance is very small, worth 1.3% of annual global supply, and can be easily digested by power station coal stockpiles (3 weeks worth = 21/365 = 5.75% annual supply) So coal has run too far too fast.
Comparatively, the supply shortage of PGM is way much bigger, the demand is much less price elastic (look at rhodium!!!). More over, investors who would not stock up coal in their backyard will be buying the physical PGM metals, which could only enhance the shortage case and make the metals even more bullish.
JRCC was pushed from $15 to $4 for a good reason. Now they pushed SWC and PAL to near all time low, also for the same reason they pushed JRCC down to $4 and below.
So stick with these two.
Why you ask? Could it have something to do with deliberate action by mgmt? One year ago there were 50 million shares outstanding. Last fall mgmt privately "placed" 25 million shares at $4/share. This cuts our legs off and gives anyone pause who might be considering buying. My recollection is that prior to this PAL tracked Pd fairly well. Since the "event" however the correlation has been poor(witness the last 4 weeks). This stock has not fulfilled the objective of being a surrogate for gold or other precious metals in these inflationary times. The best you can do is to hold for a while. Eventually the sting will fade, others will come into the stock; then you best sell before the mgmt does it to you again! IMHO
A lot of PM stocks have sunk, but if PAL puts up a few decent quarters, the share price takes care of itself. They have to show consistent positive cash flow ahead of development of the new high grade zone, and PD prices have to stay north of $450 and they'll be fine.
I agree. With PGM metals going higher. Making money is never a problem in the immediate future. And the stock price will take care of itself.
PAL delivered 16 cents per share profit in Q1. It will deliver a fantastic 2008 annual profit as the platinum and palladium prices move higher.