Investomania25 May 2018 17:12
Sorry if already posted
Is Sirius Minerals PLC on course to surge to 230p?
With Sirius Minerals PLC (LON:SXX) (SXX.L) currently trading at 34p, asking whether it could reach 230p per share may sound overly optimistic. In the short run, the chances of it doing so are clearly extremely unlikely. But in the long term I feel that the company could generate impressive levels of capital growth.
A share price of 230p would equate to a market capitalisation of around £11 billion. That’s roughly in line with the company’s NPV, which suggests that its current price level of 34p may be relatively appealing in my view.
In terms of Sirius Minerals’ progress, it seems to be delivering on its long-term strategy. There is still a long way to go until first production commences, while financing, agronomy trials and marketing plans have not yet fully taken shape. But judging by the company’s recent updates, it seems to be moving in the right direction to my mind.
The company, though, remains a relatively volatile stock to hold. Although its shares have risen significantly in the last few months, I believe that volatility could be ahead. News flow could disappoint, or investors may decide to take profits after what has been a strong run in 2018 so far.
In the long run, however, Sirius Minerals appears to have a bright future to my mind. Its POLY4 fertiliser could experience increasing demand over the coming years, as the pressure on food production increases as a result of rising world population. This could provide it with a tailwind that may allow it to deliver on its financial projections.
And with what seems to be a solid strategy and sound management team, the prospects for the business seem to be bright. Its potential rewards could be high and while it may be riskier than many of its larger industry peers, I believe that its investment prospects remain impressive.
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