A Big Upgrade for Stillwater Mining

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Every day, the sun rises on Wall Street, and a plethora of professional analysts wake to issue new opinions on stocks. Here at the Fool, we use our "This Just In" column to examine some of these picks -- and the track records of the companies behind them -- so individuals can make better investing decisions.

In addition to following professional banks, anyone can use Motley Fool CAPS to monitor the collective opinions of more than 140,000 members, many of whom demonstrate better investing insight than published analysts do.

After spending more than a year stuck at a three- and four-star rank in CAPS, enough top-performing members have turned bullish on Stillwater Mining (NYSE: SWC) recently to upgrade it to five stars. A total of 420 members have given their opinion on the company, with many offering analysis and commentary to explain their recent optimism.

Shares of Stillwater Mining, North American Palladium (NYSE: PAL), and PolyMet Mining (NYSE: PLM) are all working their way higher after plummeting in 2008. Although prices for precious group metals are currently lower than last year's, Stillwater has been able to benefit from restructuring its mining operations and focusing on cost containment. While Stillwater's average combined sales realization on mined palladium and platinum ounces decreased 28% year over year, it still managed to generate free cash flow over the past 12 months.

Stillwater will miss the fixed-price sales that it had received from its now-terminated General Motors contract. However, it expects to sell those metals elsewhere, and it still benefits from price-floor protection with its Ford (NYSE: F) contract. While predictions of long-term inflation drive some investors toward precious metal miners such as Yamana Gold (NYSE: AUY) and Silver Wheaton (NYSE: SLW), some CAPS members also see platinum as a hedge against inflation, in addition to its industrial uses. As Chinese jewelry demand fuels Fuqi International's (Nasdaq: FUQI) growth, Stillwater anticipates that demand for palladium will increase as well, since it is used in the growing jewelry industry in China.

Do you think Stillwater Mining deserves five-star status? Add your thoughts in the comments box below, or head over to CAPS to rate it yourself. While you're at it, see what the very best CAPS analysts are saying now about the company.