What: Stillwater Mining Company's (NYSE:SWC) shares jumped nearly 27% last month. That move continues a strong uptrend since the middle of January that's left the shares with a gain of around 20% on the year.
So what: Stillwater's main commodities are platinum and palladium. Like most commodities, the platinum group of metals have been in a funk since around 2011. After a steep price dive in early January, Stillwater was down more than 70% since the start of 2011. However, a lot has changed since that point.
The biggest change, of course, being that the company's main commodities have started to rebound. That upturn started in the middle of January, not surprisingly at around the same time that Stillwater's shares began their climb higher. From that nadir, Stillwater's stock is up a massive 90%!
The company managed to eek out a small profit in the final stanza of 2015, so the commodity upturn suggests that Stillwater could start 2016 out on a solid financial note. Couple that with the cost cutting that's taken place during the commodity downturn (the company reduced its all in sustaining costs more than it projected last year), and it's understandable that investors would take a positive view of Stillwater's future.
Now what: Stillwater has done an admirable job of controlling what it can. But it's obvious that commodity prices are the big ticket item here. With commodities prices moving higher last month, the miner's shares rallied strongly. That said, Stillwater's stock is still well off its highs of just a few years ago, so there could be more upside from here. But it's going to depend on commodity prices and the ride could be bumpy.