Update for Sibanye Limited (SBGL)….and a Brief Analysis of Blackstone (BX)

By. Tyler R. Martin

Sibanye Limited (SBGL) has been surging following the conclusion of the AMCU unions strike. The agreement includes a three year wage agreement including 4000 Rand in cash to each of the 14000 South African workers who will now be reassuming gold productions. This will allow Sibanye Limited (SBGL) to sell gold at gold’s current price (1275 dollars per ounce) and will will bolster the struggling balance sheet to acceptable levels within the next year…buying SBGL now at its current price of 4.07 dollars per share would certainly be considered a steal and the increased production over the next several months will drive the price even higher.

Blackstone LP is an asset management Limited partnership which I personally have done very will with over the past three years. Currently trading at 39.46 dollars per share, the price has of late remained quite stagnant, with the majority of my unrealized capital gains occurring over the past week, however, I have slowly accumulated several shared between the prices of 30 and 40 dollars and have collected an average distribution of ~8%. Interestingly enough, the reason for the growth of late is the result of the management’s decision to change the Limited Partnership status of the company to a C Corp, meaning it will operate more like that of a normal company. This will allow Blackstone to be bought up by more institutional investors and will cause an influx of investable cash in the next several years (the BX management team has an excellent track record for return on investment). It is my assessment that this will lead to significant appreciation of the share price and a more stable and steadily growing dividend.

Full disclosure, I own shares of both of these companies and have no plans of selling any time soon

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.