Stillwater Mining Co.

Stillwater Mining Co (SMC) is on a terrific run, thanks to surging metals prices. The earnings outlook for this Zacks #1 Rank (Strong Buy) keeps getting better.

Company Description

Stillwater is the only domestic producer of palladium and platinum, as well as the largest primary producer of platinum group metals outside of South Africa and Russia.

New High on Production News

Shares of SMC hit new highs on Jan 12 after the company announced mine production results. While the overall levels were down from last year, the company just eclipsed the high end of its expectations and the surging metal prices were enough to keep investors happy.

These industrial metals are surging thanks to anticipated increases globally, particularly in the BRIC countries. While some may be worried about a pull back, the momentum is on our side right now.

Earnings Look Great

Currently the Zacks Consensus Estimate is calling for the annual EPS number for 2010 to come in at $0.56, a stark contrast to the 4-cent loss in 2009. Next year's projections are averaging $1.76, more than triple the expected 2010 number. Also, the outlook for 2011 continues to improve. Over the past to months, the Zacks Consensus Estimates is up from $0.94.

Why Not an ETF?

If you are just looking for exposure to either or both of these precious metals, you may ask why not just pick and ETF like ETFS Physical Palladium (PALL or ETFS Physical Platinum (PPLT. Well you can see in the chat below that Stillwater is trumping both ETFs over the past year.

The Chart

Shares of SMC are a bit volatile, which can be expected, but you can the longer term trend is holding strong. The stock continues its streak of setting new highs and should continue to do so as long as the global recovery remains underway.

Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service

Read the full analyst report on SWC