sandstorm goldI have shares of Sandstorm gold with 2 different symbols; SNDXF and SNXXF; I can’t seem to pull up any information on SNXXF and don’t remember why I bought it. Can you tell me what it is?
This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.
SNXXF are warrants on Sandstorm Gold.
I am seeing a 25% drop today in these, any clue why Travis? Volume is lighter than average and the stock itself has not moved much.
Thanks!
I wouldn’t worry about day-to-day movements in the price of such an illiquid stock — it was probably someone who needed to sell a bunch in a hurry on a day when there weren’t many orders out there to buy. The warrants bounced back pretty quick, so some folks must have noticed the bargain price — always look at the Canadian listing for the warrants, SSL.WT, you can see that it’s priced far differently than the pink sheets were as of the close last night, as far as I know that’s just an aberration due to lack of liquidity and I expect the two will probably converge in price quickly. As long as there are enough buyers and sellers active in the market — which isn’t always a given in the pink sheets, particularly for tiny ignored issues — the price of the two should be substantially identical (absent the difference in currency) since arbitrage between the US and Canadian markets is extremely easy.
The shorthand for valuing the warrants is that it takes five warrants plus $3 in cash (US dollars) to get a share of Sandstorm Gold (SSL.TO or SNDXF). So multiply the price of the warrant by five, add three bucks, and there’s your fair “in the money” price for the warrants. The nature of the leverage means that the warrants should move faster and farther than the common stock whenever the underlying stock rises or falls, so there is certainly more volatility and more risk, but you do get leveraged exposure to the underlying stock for a couple years (I believe it’s October 2014 expiration, but would have to double check) without having to pay much for that time exposure, which appeals to me. I own both the warrants and the common stock, and have bought warrants a couple times when pricing got silly enough that the warrants were actually briefly at a discount to the common.
Wow, thanks for the detailed updated. Super helpful, I was thinking it was prolly due to low volume, good to know.
Also, this 25% discount is very tempting. I may jump on board and buy a few more.
You are correct wrt the April 14 date (from your comments in the below link)
http://stockgumshoe.com/reviews/phase-1-investor/how-to-put-one-million-ounces-of-pure-gold-in-your-name-in-the-next-72-hours/
I was intrigued about SNDXF and FNV- would you buy these ina retirement account or are they just as suitable in a regular taxable account?