Platinum is an extremely rare metal that is in high demand. Not only is it used in jewelry, it has applications in electrical circuits and medicine.

There is reason to think platinum prices could be ready to rise. The primary reason is that several platinum mines have closed while demand remains strong. If supply continues to trail demand, the price could go up dramatically. (See also: These Charts Suggest Now Is the Time to Buy Platinum.)

These four stocks were chosen based on the companies’ abilities to quickly deliver increased amounts of platinum if demand soars. In other words, there are no startups on this list.

However, there are stocks here that are priced under $5 per share. When a stock is that cheap, it tends to be more volatile than higher-priced stocks. Of course, when an inexpensive stock makes a move upward of even a few cents, this can mean a higher percentage gain for investors when compared to a more expensive stock that moves a few cents. All figures are current as of February 22, 2018.

1. Sibanye Gold 

Don’t let Sibanye Gold's (SBGL) name fool you. The company owns Stillwater Mining, which produces platinum.

In June 2017, the company fired 1,500 workers who went out on strike. The stock price dropped dramatically, and began forming a new base. The stock has tested the lows twice since then and seems to have stabilized. Investors will have to decide if this is a bargain. If platinum prices rise, this mine could respond with increased production and capitalize on the uptrend.

  • Avg. Volume:     3,337,426
  • Market Cap:       $1.92 billion
  • PE Ratio (TTM): N/A
  • EPS (TTM):       -0.50
  • Dividend & Yield:            0.41 (8.95%)
  • 1y Target Est:    6.15

2. Ivanhoe Mines Ltd. 

The stock price for Ivanhoe Mines (IVN.TO) has been volatile over the last five years, treading near those five-year highs through early 2018, but then losing more than 20% over the last month. It currently stands at $3.10 per share. Nonetheless the outlook for the next 12 months is positive with analysts' consensus forecast at $5.92 per share, which would mark a rise of 42%. Analysts’ consensus rating is a “buy.”

The company has a market cap of $3.283 billion.

This is an African company that mines several metals, including platinum. The diversity of metals in the portfolio helps stabilize Ivanhoe’s share price because it is not entirely dependent on platinum.

  • Avg. Volume:     1,512,446
  • Market Cap:       $2.452 billion
  • PE Ratio (TTM): N/A
  • EPS (TTM):       -0.05
  • Dividend & Yield:            N/A (N/A)
  • 1y Target Est:    5.64

3. Nickel Creek Platinum

Nickel Creek Platinum Ltd. (WG.TO) is based in Canada. It mines both platinum and nickel. The company was previously known as Wellgreen Platinum but rebranded in early 2018 as Nickel Creek. The stock has seen a sharp drop since November 2016, and is currently trading at $0.28 per share. 

Wellgreen engages in open pit mining, which keeps the company’s costs lower than those of underground miners. The open-pit approach allows the company to use large equipment, and therefore increase productivity.

Wellgreen is focusing its efforts in the Yukon. The land being mined is next to a highway, which will further reduce the company’s transportation costs for its product.  

  • Avg. Volume:     121,205
  • Market Cap:       $66.239 million
  • PE Ratio (TTM): N/A
  • EPS (TTM):       -0.06
  • Dividend & Yield:            N/A (N/A)
  • 1y Target Est:    N/A

4. Platinum Group Metals Ltd.

Trading around $0.36 a share, Platinum Group Metals (PLG) is trying to find a bottom in its price. The company had a consensus target price of $0.60 at the beginning of 2016 and moved above $3.40, but lost all of those gains in 2017. Investors will have to decide if the current levels offer a buying opportunity or not. 

It should be noted that this is not a pure platinum play. The company also develops palladium, rhodium, gold, ruthenium, iridium, nickel, copper, chromium and vanadium.

  • Avg. Volume:     983,432
  • Market Cap:       $54.55 million
  • PE Ratio (TTM): N/A
  • EPS (TTM):       -3.971
  • Dividend & Yield:  N/A (N/A)
  • 1y Target Est:   N/A

The Bottom Line

Investing in platinum stocks presents two tasks for investors. The first duty is to find viable companies, and the second need is to correctly predict the rise in the price of platinum. The stocks on this list that have exposure to Africa will always have to deal with labor force problems, so that could affect their productivity.

As for the metal itself, expect volatility to continue throughout 2018, but watch for a generally upward trend. (See also: A Beginner's Guide To Precious Metals.)

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