Why Stillwater's Drowning So Far This Year

As we've hit the halfway point for 2012, now's a good time to look back at what's happening with the stocks that interest you. By making sure you know the important things that a company accomplished -- as well as the setbacks it experienced -- you can make a better decision about whether it's a smart investment for your portfolio.

Today, let's take a look at Stillwater Mining (NYSE: SWC  ) . The miner is one of just two producers of platinum and palladium in North America, both of which are far rarer than gold despite fetching lower prices than the yellow metal. But Stillwater's stock hasn't done well this year as concerns about precious metals have forced prices lower. Let's take a quick look at how the stock is doing so far this year.

Stats on Stillwater Mining

2012 YTD Return (18.4%)
Market Capitalization $989 million
Revenue, Most Recent Quarter $203.1 million
Year-Over-Year Revenue Growth, Most Recent Quarter 19.4%
Net Income, Most Recent Quarter $2.4 million
Year-Over-Year Net Income Growth, Most Recent Quarter (93.4%)
CAPS Rating (out of 5) ***

Source: S&P Capital IQ.

Why is Stillwater Mining losing in 2012?
Stillwater had a very rough 2011, as improved production wasn't enough to outweigh concerns that the company overpaid for its acquisition of gold and copper miner Peregrine Metals. The shares lost half their value even as precious-metals prices held up pretty well.

Now, those favorable trends have given way to price declines. Like fellow platinum-group metal producer North American Palladium (NYSE: PAL  ) , Stillwater isn't benefiting from the drop in platinum and palladium prices recently. Moreover, the Peregrine buyout gave the company exposure to copper at what seems to have been the perfectly wrong time, as giants Freeport-McMoRan (NYSE: FCX  ) and Southern Copper (NYSE: SCCO  ) have both suffered from drops in copper prices well off their recent highs.

At the beginning of the year, it appeared that platinum and palladium might get a boost from increased jewelry demand. But as a top premium jewelry retailer, Tiffany (NYSE: TIF  ) has finally started running into difficulties of its own, and that doesn't make things easier for Stillwater.

To improve, Stillwater needs to have the risk-on trade rise in popularity again. Historically, platinum hasn't traded cheaper than gold for very long, and if the white metal can climb higher, it could bring Stillwater's stock along with it.

Stillwater Mining hasn't behaved well lately, but if you like precious metals stocks, we've got another company you really should look at more closely. Read The Motley Fool's latest special report on gold to discover the tiny gold stock digging up massive profits. It's free but only available for a limited time.

Click here to add Stillwater Mining to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. The Motley Fool owns shares of Freeport-McMoRan Copper & Gold and Tiffany. Motley Fool newsletter services have recommended shorting Tiffany. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.

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