We are facing the massive sell off today. It is likely not justified. The company like PAL should not lose 25% of the value by announcing that they deiced to reduce production and focus their limited resources on the development and cost control. Holding $4.00 would be important. It would take several days for the situation to stabilize. I don't expect the quick rwebound, but patient investors will be rewarded since the fundamentals did not change
Twelve to thirteen months ago, when they just announced the reopening of the mines and were producing nothing, PD was trading in the low to mid-fives, while PAL was trading between four and five before settling into the mid-threes for the Summer.
They've added a few shares since then, but based on those past numbers, it sure does look like this stock should be at the bottom here in the upper threes. Unfortunately for shareholders, the past does not always translate into the present. We shall see.
Agree -all the comparisons say "buy". But I think the bad taste of the last report and the tactical plan changes have to dissipate. Margin calls confuse the issue too.
The mid-May short report will be interesting. Did the 9M+ shorts do some covering or do they (whomever they are) feel there is more downside.
IMO those wanting in are about equal to those wanting out. They just aren't there at the same time during the day.
Also if you have a really big gain (or loss) pennies don't really matter. Someone short at $6 who wants to cover here will just throw in a market order - doesn't really care if drives the price up 5-10 cents - they just want out. IMO that's what causes some of these short term spikes.
I hope it's safe. I sold almost half of my PAL holdings earlier in the week. I like platinum and palladium and hope that the knife won't fall further. I placed an order to buy back what I sold earlier.
Better for PAL to tread water here and not report much in the way of earnings until the market is ready to pay up for a play on Pd.
And that clearly isn't now.
Once speculators want to get into the Pd plays, it won't matter what the earnings are, PAL could go to 10-15 bucks just because of increased investor interest ....evenif zero earnings.
Then PAL turns on the tap and starts to put up better earnings which would add fuel to the fire for even more PPS momentum.
Management has some latitude in terms of timing as to when earnings can be improved (or not) be deciding how much low grade surface stockpiles are blended and processed along with higher grade below ground material.
IOW there's a small degree of earnings management that is possible here so maybe that explains a little of this past Q's poor results.
That and everything but the kichen sink in terms of exploration expense write-offs being taken on an accelerated basis???
If anything, PAL's earnings are being deliberately held down just a wee bit (IMO) and this could set us up for more of a coiled spring effect once the time is right.
There's no guarantee that good company execution would mean great things for stockholders.
Sentiment to the sector is critically important for valuation.
Come right down to it, sentiment to a sector is probably more important than company execution and has been the sort of thing I've been a little hoping for.
see the Rare earths as an example.
IF, and make no mistake, it's an 'if'...the Russian Pd supply situation from Norilsk's nickel mining operations in Russia should soon fall like some expect, the price of Pd could easily eclipse it's old highs in a hurry.
And that's just the sort of thing that could suddenly change sentiment to the sector.
And what a sector it would be with so little other choice in relatively pure play names to choose from.
North American Palladium (the mining company) is not about palladium prices.
PAL (the stock) is about gold and palladium prices.
PAL didn't hit $7.99 because North American Palladium is such a great company. The stock hit $7.99 because of the relentless news stories about palladium price going up and PAL stock price going up with it.
North American Palladium hasn't changed all that much to have PAL stock price drop $5.75 to $4.00 in a few days. Speculators were already wary about palladium prices after the Japan earthquake and the earnings loss gave them a reason to leave.
Bell, what do you know about production costs and Diesel fuel? Oil prices have gone up a lot since last year.
I thought they said that LDI (palladium) ramp uses Diesel fueled trucks to bring ore up to the bottom of the open pit, then more Diesel to get the ore out of the pit.
Using the ramp takes Diesel fuel to drive the trucks down and much more to drive the trucks back up.
Anyone take the height and ramp rise grade to figure out how long the ramp is?
Until the lift is done, which will bring ore all the way to the surface, NAP is going to hurt bad from oil prices.
"PAL is not about the price of PD."
Well, I'm not sure you can TOTALLY divorce PAL from the price of Pd, but I see your point: it would be helpful to the share price of PAL if management could execute.
I believe this is in full swing and will effect miners of PM's and base metals! Found this intresting and very true, from another message board!
It is odd the way base metals miners decline when the base metals except for copper and zinc move into backwardation. Lead,Nickel,Aluminum,Molybdenum,Cobalt,even scrap Steel Billet move deeper into backwardation. Copper and zinc both hoover near backwardation. That indicates shortages in the system. The metals prices say higher, the stock prices of the miners say lower. Out of Balance, base metals miners and base metals.
You say "We are facing the massive sell off today. It is likely not justified. The company like PAL should not lose 25% of the value by announcing that they deiced to reduce production and focus their limited resources on the development and cost control"
Can you read what you people are saying and writting and then say what should happen?
Do you know how stocks work? Do you know how the markets work? So there was manipulation. So you learn to adapt to it. You dont try to stand in front of the train and say I wont budge. They really dont care since they have a lot more money than you do. Now that the MM's know the company wont have cash flow enough to pay for expansion they will keep on hitting it because they know the company has to come to the markets to get financing. Just because they are going to use debt means nothing. That money they pay the company to buy the debt comes from the idiots who bought today. Ah yep YOU PAID for these guys to earn their free intrest on the loan they will give to the company. AND they will take that loan to the bank when it becomes due.
Its amazing that even people who you seen play the markets for years behaving like the elevator boys. How can you not know what they are doing? This stocks not going anywhere. In fact its pretty certain this stock will not break the price they issue the notes at for many years to come. And the price will be lower than where it is now.
The risk reward profile for this stock just hit an all time high. The shorts are in control and until the company can show they are going to generate massive cash flows the stocks dead and you are looking at 2 years at least. You want example? Just look at the other miners. Unless palladium goes to 1400 dont expect PAL to hit $8. Silver went to $50 and CDE never broke its highs it made at their financing deal years ago when silver was $10.
I prefer the debates based on the stock fundamentals instead of attacking other posters. Predicting where commodities are going is mission impossible. We might be in the bubble, we might be going up significantly. No one knows. Everyone is entitled to his own opinion, but this is just an opinon. I do belive that holding up $4.00 at the close yesterday and so far today is important, becuse it might be the good indication where the short term bottom is. The next few days are critical, but if we manage to stay to hold that level, we might move more in tune with the direction of the commodites next week