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 three 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.

Source: SFA (Oxford) via World Platinum Investment Council 

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 June 11, 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 tested the lows twice since then and appeared to have stabilized. but its taken a big hit recently as the price of precious metals, particularly gold, have been on the slide. 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:     3,931,673
  • Market Cap:       $1.576 billion
  • PE Ratio (TTM): N/A
  • EPS (TTM):       -0.73
  • Dividend & Yield:            0.41 (10.50%)
  • 1y Target Est:    5.04

2. Ivanhoe Mines Ltd. 

The stock price for Ivanhoe Mines (IVN.TO) has been volatile over the last five years, not to mention 2018. The stock treaded near five-year highs through January of 2018, but then lost more than 30% through mid-February. It spent the next two months treading water but has been on an upswing since mid-May. It currently stands at $3.35 per share, down 21% year-to-date. Nonetheless the outlook for the next 12 months is positive with analysts' consensus forecast at $5.44 per share, which would mark a rise of 65%. Analysts’ consensus rating is a “buy.”

The company has a market cap of $2.24 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:     1,388,647
  • Market Cap:       $2.651 billion
  • PE Ratio (TTM): N/A
  • EPS (TTM):       $0.21
  • Dividend & Yield: N/A (N/A)
  • 1y Target Est:    5.44

3. Nickel Creek Platinum

Nickel Creek Platinum Ltd. (NCP.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 $0.24 per share. 

Nickel Creek 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. The company 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:     38,152
  • Market Cap:       $56.777 million
  • PE Ratio (TTM): N/A
  • EPS (TTM):       -0.02
  • Dividend & Yield:            N/A (N/A)
  • 1y Target Est:    1.20

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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