How To Buy Palladium Stock
Despite the price drop, palladium is still more expensive than gold, which is priced at roughly $1,800 per ounce. Why is palladium considered one of the most valuable precious metals on the market? There are many opportunities that allow palladium to increase in value over time, which could make it a profitable investment opportunity for you.
how to buy palladium stock
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This precious metal is valuable because it is used in the production of automobiles, electronics, and dentistry. The price of precious metals tend to be volatile in the short-term and palladium is no exception. It has a history of price swings, especially since there is has been a supply shortage of palladium, which could help its price rally.
Just like gold, silver, and platinum, palladium is often held as an investment. It holds several benefits when used as a store of wealth, just like other precious metals. A store of value refers to an asset or commodity that maintains its value over a period of time. Palladium is a store of wealth whose value moves at a similar pace like that of gold.
Moreover, palladium is a rarer precious metal that gold, which means its value can increase in the future. Keep in mind that palladium is more volatile compared with other precious metals. This means its price may fluctuate due to changes in supply and demand.
Living in a post-pandemic economy means dealing with inflation. Commodities and physical assets like palladium are some of the best hedges against inflation. For the past six months, palladium has returned more than 7% to investors. During a similar time frame, the S&P 500 is down more than 16%. In a market lined with uncertainty, palladium can help add growth to an investment portfolio.
Palladium is a precious metal that is in high demand. Palladium is in high demand from various industries but there is a low supply. This makes the precious metal scarce, which is an attractive feature for an investment. There are many applications for palladium, making it one of the most sought after precious metals on the market.
A popular way to hold palladium is to physically own palladium bullion. This can consist of palladium bullion bars or coins that you can buy from a precious metals dealer. The two forms of palladium include bars and coins and are available in different sizes.
An easy and passive way to invest in palladium is through exchange-traded funds. With palladium ETFs, you are not directly investing in the precious metal, rather you are investing in a fund backed by palladium. Palladium ETFs allow investors to gain exposure to the precious metal without having to personally own it. ETFs carry an expense ratio which is the management fee associated with the fund. These fees may vary depending on the investment product.
Similar to palladium ETFs, you can also purchase palladium-linked stocks. Purchasing shares of publicly-traded companies that are focused on palladium can be another way to gain exposure to this precious metal.
While gold and silver have done very well over the past few months as recession fears continue to grow, it's easy for investors to overlook opportunities in other precious metal markets. The first that comes to my mind is palladium, which in the first quarter of 2019 saw prices jump to $1,560 per ounce before crashing back down to the $1,300 price range shortly after.
While many called this the end of the palladium bubble, the reality is that the precious metal has come back stronger than ever, surpassing the price of gold yet again. Prices have set a new all-time record, climbing above $1,600 per ounce.
Unlike gold and silver, which don't have much industrial demand besides being used in jewelry, palladium's demand also comes from its use as a material in catalytic converters for gasoline engines. With over half of the global palladium demand originating from this key car component, prices are expected to continue to rise as companies pursue more environmentally friendly solutions, both in the automobile sector and elsewhere.
There's a strong case to be made that palladium miners might be in a better long-term situation than some of their rivals who focus on gold, silver, or platinum. With this in mind, here are two palladium producers that I'd argue are among the best stocks in the sector.
With a market cap of about $720 million, North American Palladium (PALDF) is a pure-play palladium stock that is up more than 60% so far since the beginning of the year. In March, when palladium prices first peaked, the stock had shot up to nearly $20 per share, more than doubling from where it started 2019, before tumbling back down. While this short-lived meteoric rise might have been fueled, more than anything else, by the excitement at the time surrounding palladium, North American Palladium's long-term potential remains excellent.
The company owns just a single mining asset, the Lac des Iles mine in Ontario, Canada, which has seen considerable growth in the past few years. Over the past quarter, the facility produced 56,121 ounces of palladium, giving the company a record-setting quarterly revenue. Annual output ran at about a 237,000 ounce rate. Net income came in at $28 million, a roughly 160% increase from the $10.8 million reported during Q2 2018.
Estimates on the mine's palladium reserves have been updated, with previous figures suggesting that the Lac des Iles mine had 36 million metric tons of ore. However, data from the company suggests that this figure could be as high as 40.9 million metric tons, further extending the lifecycle of this mine, which is the lifeblood of the company.
Overall, North American Palladium expects an average all-in sustaining cost (AISC) -- a key measure of a project's overall expenses -- to come in at $834 per ounce of palladium. Considering that the precious metal is trading at $1,600 per ounce, it's easy to see how the company could be set for significant growth as production rises and expenses continue to fall. To top it all off, North American Palladium has kept its balance sheet clean and is currently debt-free, except for capital leases.
While its name might indicate otherwise, Sibanye Gold (SBSW -0.60%) is one of the world's largest palladium producers with an annual output of 154,000 ounces. Most of its production comes from palladium assets it acquired in the buyout of the Stillwater Mining Company, a Montana-based producer that's historically been the largest palladium miner in the U.S.
A large-cap miner worth $12.1 billion, Sibanye Gold has seen its shares surge by more than 70% since the beginning of 2019. Most of the palladium production that it inherited from Stillwater is split between two underground mines in south central Montana that also produce other precious metals such as platinum.
While the company might technically produce more gold then palladium thanks to its South African projects, it's the company's palladium-focused assets that have seen the most growth recently. According to the company's integrated annual report, adjusted EBITDA for its palladium-producing U.S. Stillwater facilities grew from $161 million in 2017 to $314 million in 2018, with figures expected to reach $400 million to $500 million in 2019 should palladium prices remain strong. At the same time, Sibanye Gold's palladium segment is the most profitable of all its operations, with an adjusted EBITDA margin of 26% in comparison to a 19% margin for the gold-focused South African project.
Investors can find comfort knowing that the Sibanye Gold is diversified mainly between two very well-performing precious metals, palladium and gold, and isn't focused just on a single mine or facility to generate revenue.
With billions of dollars in transaction volume and consistently competitive prices, Monex remains a preferred source for physical palladium investments. Contact one of our Account Representatives today and discover how to incorporate palladium coins into your personal investment program
Buying palladium bullion is a convenient and cost-effective way to enter into the often-exciting world of palladium investments. With the market's impressive supply and demand fundamentals, and growing prospects for a potential supply squeeze in the years ahead, an investment in palladium bullion may be one of the best bets now and in the future. Monex offers palladium bullion in 10 ounce bars of .9995 fineness for personal delivery or storage, if desired, through a Monex Atlas Account. Each bar we offer is hallmarked by a leading refiner to certify the bar's weight and purity.
Monex can arrange for the secure storage of your palladium bullion or coin investments. Monex will deliver your palladium with full title and ownership in your name to one of the independent bank/depository facilities that provide storage for Monex customers. These bank/depositories include multiple secure depository locations throughout the country.
Almost every investment in physical metal is unique. For this reason, calculating shipping time for a unique palladium product has no single universal answer. Delivery of your metal is dependent on a large variety of factors including the quantity of metals, when your purchase is made, and more.
All shipments of palladium bars and coins are insured against loss or damage in transit. If you decide to have your palladium delivered to and stored by a bank/depository, the metal is fully insured in transit and while in storage.
Selling your palladium bullion bars or coin investment back to Monex is a relatively easy process. When you are ready to sell your palladium, simply contact your Monex account representative for shipping instructions. Shipments must then be sent by USPS registered and insured mail with a return receipt. Customers are responsible for fully insuring shipments, until received by Monex. Once the shipment is received and verified you will be notified. Proceeds of the sale will be sent to you in the form of a check or bank wire, or if you prefer, credited to your account. If your palladium is in storage at one of the banks/depositories, you can sell your metal over the phone at any time without delay. The transfer of title from you to Monex will follow your sale, and the bank/depository will notify you by mail that the transfer of title has occurred. 041b061a72