Will Stillwater Mining Hit Paydirt in 2013?

As 2013 begins, now's a good time to look at the future prospects for the stocks you own. If you don't know where a company's headed in the next year and beyond, then it's impossible to make an informed decision about whether you should add the stock to your portfolio -- or sell it if you already own it.

Today, I'll look at Stillwater Mining (NYSE: SWC  ) . The platinum-group metals miner bounced back from adversity in 2012 as prices for platinum and palladium stayed relatively stable. Still, investors aren't quite sure what to make of the company after it diversified into gold and copper mining in 2011. Below, you'll learn more about Stillwater Mining's prospects for 2013.

Stats on Stillwater Mining

 

 

Average Stock Target Price

$13.76

Full-Year 2012 EPS Estimate

$0.30

Full-Year 2013 EPS Estimate

$0.50

Full-Year 2012 Sales Growth Estimate

(12.9%)

Full-Year 2013 Sales Growth Estimate

22.7%

Forward P/E

27.0

Source: Yahoo Finance.

Will Stillwater Mining keep moving higher in 2013?
Analysts expect a pretty big turnaround for Stillwater from a fundamental perspective. After a huge plunge in revenue and earnings in 2012, Stillwater should get a big chunk of its profits back this year. Yet those gains may not make it back into the stock price, as analysts' target price is just 2% higher than where shares trade right now.

It's important to remember that as a platinum-group metals miner, Stillwater doesn't have the same exposure that most mining stocks do. With expectations of higher auto sales and a general jump in the economy, precious metals with more industrial applications are gaining in favor, as bullion-tracking ETFs ETFS Physical Platinum (NYSEMKT: PPLT  ) and ETFS Physical Palladium (NYSEMKT: PALL  ) have seen huge gains in the amount of metal they hold on behalf of investors. As the only U.S. producer of platinum and palladium and with its only North American rival being North American Palladium (NYSEMKT: PAL  ) , Stillwater has jumped sharply to start the New Year, reflecting increased commercial and investor interest.

Arguably the biggest issue for Stillwater going forward, though, is what activist investors at the Clinton Group will seek from the company. Expectations of CEO Frank McAllister resigning are unrealistic, but complaints about large convertible-bond issues last fall seem justified, and if Clinton Group is right that taking steps to boost shares could lead to a rise to $21 to $23 per share, it would mean a better than 50% rise for investors.

For Stillwater to hit paydirt, it'll need to ride the wave of rising industrial activity and avoid operational slipups. If it can manage that, though, then Stillwater could well keep giving shareholders decent gains in 2013 and beyond.

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