Market Wrap - Stock Pick — Sibanye Gold
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Sam Mokorosi from Vunani Capital chose Sibanye Gold Limited as his stock pick of the day.
"Somebody that's coming out of a quagmire as well is Sibanye obviously they had that strike with AMCU and what's really interesting about Sibanye is that 80% of their free cash flow now comes from pgms and and the market still sees them as a gold counter. So that is rating them downwards, so we think that because we are still bullish on gold in the long term, trade issues, recession issues in the US, and we think the rand will continue being weak over the medium term but we are still bullish on the rand price in gold and so obviously the question then is who do you go for among the listed gold counters? Because even if the rand gold price is going up, it's still a tough operating environment for our gold miners and so we think that the markets are mispricing Sibanye because of that gold and at the same time we like the pgms and so that's why we're going for Sibanye at the moment."
"Somebody that's coming out of a quagmire as well is Sibanye obviously they had that strike with AMCU and what's really interesting about Sibanye is that 80% of their free cash flow now comes from pgms and and the market still sees them as a gold counter. So that is rating them downwards, so we think that because we are still bullish on gold in the long term, trade issues, recession issues in the US, and we think the rand will continue being weak over the medium term but we are still bullish on the rand price in gold and so obviously the question then is who do you go for among the listed gold counters? Because even if the rand gold price is going up, it's still a tough operating environment for our gold miners and so we think that the markets are mispricing Sibanye because of that gold and at the same time we like the pgms and so that's why we're going for Sibanye at the moment."
