now that
It was hard to know what to make of Sabina when its stock price was for so long in la la land.
Now it it starting to show a market cap that actually is within the realm of rationality.
I would say in a decently strong market for precious metals companies that Sabina stock probably deserves about a $6-8 per share valuation.
So a price in the 2's is at least now something that shows some sign of rationality, compared to when it sold for less than a buck.
What is the upside on SBB? Well, if they find some more gold they could be looking at about 15 million ounces of gold equivalent between Back River and Hackett, and a fairly generous valuation on that would be $200 per ounce which would make the company worth $3 billion market cap.
I think their fully diluted shares are about 140 million at this point. So I would say something pretty much a best case analysis would suggest that SBB shares could run as high as about $21 per share.
In my view that gives some insight into what the ceiling probably is on Sabina stock. Now people would say geez $21 per share you are dreaming but I emphasize I am trying to find the ceiling, not that the stock will necessarily get there.
The point being, I think this stock probably doesn't have the upside potential to go to $25 per share, and $50 or $100 per share is totally out of the question.
So now you can start getting some feeling for where it could head. I think the prospects are excellent for it to go to $6-8 per share and I could imagine in a very strong precious metals market it getting up to $10-20 per share.
What about the downside? The fact that they keep reporting good news suggests to me this stock is not going to have a slump as an individual company. If the precious metals sector in general has a slump, then I could easily see SBB stock going down along with the rest of them. If you could ever buy this thing again in the low 1.xx range I think it would be a nice buy, and if somehow it ever got back to 0.xx I would say load up the truck.
Just in case there is such a slump, and we all know how volitile the precious metals market can be, I have half my money in cash so if there is ever a time to load up the truck, I will have a good shovel.