Stillwater Investors Take Profits Despite BofA's Reinstated Buy Rating

Investors of Stillwater Mining Company (NYSE: SWC) took profits despite Bank of America Merrill Lynch reinstated its Buy rating on the stock, saying it's a preferred investment vehicle to gain PGM exposure.

"In our view, Stillwater is a preferred way for Investors to gain Platinum Group Metal (PGM) exposure given Its growth, low relative operating costs, solid balance sheet, stable operating jurisdiction and attractive valuation," analyst Lawson Winder wrote in a note.

Winder expects Stillwater's PGM production growing by 24 percent through to 2020 (vs.2015) and its AISC declining 14 percent over the same period. The brokerage's forecast for 2016 AISC of S648/oz places the company as one of the lowest cost in BoFA's global PGM coverage.

"As an indication of Montana's status as a stable mining jurisdiction Stillwater was able to tenure its workforce by 11% in 2015 to drive needed productivity improvements without issue, while South African miners tend face political interference when attempting to downslze," Winder highlighted.

The analyst said potential 2016 catalysts include improved 2016 operating guidance and a move-up in the target start date for the Blitz project.

At time of writing, shares of Stillwater fell 2.27 percent to $10.77. Winder has a price objective of $13.