Buy recommend18 Dec 2020 19:24
Michael Baxter:
Bushveld Minerals is a small company by the standards of the mining sector, with a market cap of £167 million, not many investors will have heard of it. Shares have fallen sharply since the 2008 peak, so why is it included here, where I am only looking at companies I deem especially interesting?
First of all, the revenue history piqued my interest — from $2.9 million in 2017 to $117 million last year.
Drill down, and you find net asset value exceeds market valuation. Usually, when you see a company that is valued by the markets at less than net assets, you can assume this is a company with low growth prospects.
The markets clearly have low expectations — the P/E ratio of Bushveld Minerals is just 3.44
But then it gets interesting — the company mines vanadium and vanadium is being hailed as a potential solution to the problem of energy storage. Vanadium-flow batteries could provide utility-scale energy storage.
As you know, as renewable energies become more critical, cracking the problem of energy storage will become one of the most important of all technology challenges, and lithium-ion batteries have shortcomings when used at the grid level.
Whether Bushveld Minerals is a good investment opportunity is a call only you can make it, but I would recommend investing time into looking more closely at the company.
Share price
15p
2020 high
23.9p
2020 low
8.8p
Five year high (2018)
48.4p
All time high (2018)
48.4p
Change last 12 months
-25%
Change last five years
697%
Change since 2012
-61%
Market cap £m
173
Yield %
N/A
P/E
3.57
Revenue growth since 2017
3,934.5%
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