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Why Sibanye-Stillwater Stock Jumped 67% in the First Half of 2019

Reuben Gregg Brewer, The Motley Fool

What happened

Shares of Sibanye-Stillwater (NYSE: SBGL) rose an incredible 67% in the first half of 2019, according to data provided by S&P Global Market Intelligence. That rise, however, was hardly a one-way trip. The stock rose through most of the first quarter and into the beginning of the second quarter, eventually advancing around 75%. Then it fell sharply, dipping about 35% from its peak by mid-May or so. And just as quickly, it started to rally again, making back almost all of what it had lost to end the period up 67%. 

So what

The biggest driving force for gold and platinum-group miner Sibanye-Stillwater was commodity pricing. On that front, gold began the year strongly, then started to fall in value, and in late May began to rally anew. Palladium and rhodium, both platinum-group metals, followed a similar trend. Platinum rose early in the year and then fell, and stabilized at a lower level. Overall, the shares of Sibanye-Stillwater generally followed the trends of the metals it produces. That's not terribly surprising.   

A pick on top of a pile of precious metals

Image source: Getty Images.

That said, there was more going on at the miner than just commodity prices. It is in the middle of a makeover. One of its first big moves was Sibanye Gold buying Stillwater, thus the Sibanye-Stillwater name. That was announced in the final days of 2016. After consummating the deal, the company then announced it was looking to buy platinum-group miner Lonmin in late 2017. That proved to be more troublesome and only got finalized last month.   

And while it was working through that second acquisition, Sibanye-Stillwater was fighting with employees at one of its main mine assets. The strike was long and contentious and, like the Lonmin acquisition, finally appears to be moving in a positive direction. After five months, the strike ended in mid-April, with both sides agreeing it was mutually beneficial to get the mine working again. 

Now what

As if that weren't enough, there were additional issues pushing the stock around, including a large share sale to help shore up its balance sheet.

The big takeaway here is that the miner's shares are being driven by a lot of different factors, none of which can really be predicted. Dealing with the often-volatile prices of precious metals is one thing; adding in all the other moving parts just complicates the matter even more. Most investors will probably want to avoid Sibanye-Stillwater until it gets its house in order (which will at least require it to integrate newly acquired Lonmin), leaving commodity prices as the only big unknown. 

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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.