What is a good price for Sandstorm metal?Hey Travis (and irregulars),
What is a solid price to buy for Sandstorm metals? I was thinking anything under .40, but was curious if anyone had a valuation that is making them target a certain price. It has really gotten creamed as of late. Any valuations or price thoughts on Sandstorm gold are welcome as well.
Thanks,
R
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Hi Russell,
I haven’t done anything with my SND position lately — this is very much both an early stage company and a commodity price-sensitive company, which means that the collapse in commodity prices (due to fear of Europe trashing the global economy) and the fear-motivated run to “safer” assets (dividend paying stocks, etc.) are both bad for Sandstorm. The company is in fine shape with a lot of cash on the books, and a substantial amount of “guaranteed” cash flow for the next 5-8 years (cash flow in excess of their current market cap), and I like their management, so they should be able to treat this crash as an opportunity to step in and fund some appealing mining and energy projects on good terms. But of course, that doesn’t mean this is the bottom — to know that you’ll have to know whether commodity prices, particularly coal but also copper, oil and natural gas, will be at good levels most of the time over the next several years. I’ve bought at prices above where Sandstorm Metals now stands, but I haven’t bought anything commodity-related over the last few weeks. As I noted a few weeks ago when I last bought shares of Sprott Resource Lending (SILU), and in some earlier comments, I think SILU is the more appealing short-term play because of their current dividend and cash flow situation, but I still think Sandstorm Metals is probably a “higher potential upside” opportunity over the long term … assuming, of course, that we don’t have a multi-year depression in commodities pricing.