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magazineGreat Ideas update: Tharisa
Tharisa (THS) 103.75p
Gain to date: 33.9%
Previous Shares view: Buy at 77.5p, 29 September 2016
Better-than-expected platinum group metals (PGMs) production has helped to lift shares in miner Tharisa (THS). The stock is now up 33.9% since we said to buy a fortnight ago.
Tharisa extracts PGMs and chrome from its mine in South Africa and sells them to China. A bullish trading update on 10 October says PGM recovery rates from its mine were higher than targeted and tons milled reached a record high. It also states that metallurgical grade chrome prices have risen by 50% in the third quarter of 2016.
These factors bode well for Tharisa’s upcoming full year results which will be published on 29 November 2016. The company has also confirmed to Shares that it intends to recommend a maiden dividend at these results.
Dividends could become a key part of the investment case in the future. Tharisa has a low cost mine with the potential to generate significant amount of cash.
Stockbroker Peel Hunt implies that its 120p price target may prove too conservative. (DC)
Keep buying the shares despite the strong run that’s already taken place. Tharisa is really cheap on a mere 4.6 times 2017 forecast earnings
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