The polymetal share price fell 26% this week. The stock price fell after the company’s announcement on May 10. The announcement was that it will leave the London Stock Exchange (LSE) and transfer to Kazakhstan’s Astana International Exchange (AIX).
The action came after a successful time for the mining company. Since March, shares have increased 39%. What is happening here? And does this ambiguity present a once-in-a-lifetime chance to purchase shares at a discount?
Is Polymetal International a reliable dividend stock?
With a current dividend yield of 41.71%, Polymetal International (lon: poly) pays an annual dividend of GBX 0.44 per share. POLY is a top dividend payer since its dividend yield exceeds 75% of all dividend-paying stocks.
The Relationship with Russia
Polymetal extracts precious metals from mines in Kazakhstan and Russia. Due to its access to these abundant resources in Central Asia, it ranks in the top five and ten producers of gold and silver globally.
In this case, it is crucial that although it has its headquarters in Jersey and has been a part of the FTSE 100, the company was started in Saint Petersburg.
Due to this connection to Russia, the Anglo-Russian miner faced enormous difficulties in 2022. The corporation lost 89% of its value in a month when Russian forces invaded Ukraine.
Surprisingly, Polymetal maintained close to £3 billion in revenue, but several fines severely reduced the company’s profitability. In the end, the business recorded its first loss in eight years.
Resumption of Cash Flows in 2023
The miner’s March 16 annual report recently brought good news. The business appears convinced that issues resulting from the Ukraine war have been resolved. Management does anticipate “the resumption of free cash flows” by 2023.
An 89% Reduction is Going on
There is potential here. At an 89% reduction from the record-high price of £20.28, we could purchase shares now for £2.42 apiece.
The company’s market value has dropped to only £1.15 billion. With a substantial margin of safety, the price-to-book ratio would be merely 0.63. In other words, we would receive £1 in assets for every £1 I invested.
This stock would undoubtedly rank among the most undervalued ones in the market if cash flows returned to normal.
What is the anticipated polymetal share price in 2023?
On January 1, 2023, the shares of Polymetal International were trading at GBX 245.50. Shares of POLY have dropped 22.6% since then and are currently trading at GBX 190.
Their predictions for the polymetal share price LSE vary from 300 to 400. They estimate that the company’s stock price will rise to GBX 300 in a year.
What is the Primary Problem?
The recent statement by Polymetal that it will transfer its listing from the LSE to AIX is my biggest concern. By doing this, the corporation could divide its mines in Kazakhstan and Russia. The Kazakhstani portion of the company might then deftly avoid any sanctions.
Only a few UK brokers make trading on the AIX possible. Polymetal is anticipated to delist from the LSE. Any stock I may own beyond that date has a hazy future.
Finding a means to move them to a different broker with an EU or Asian basis who supports AIX trading is one alternative. If we can’t, we could have to sell them or be given bonds or warrants as compensation.
What about Investing?
Overall, Polymetal is now undervalued. We decided against taking a position in the company due to the uncertainties surrounding the delisting from the LSE.
Although it sounds absurd, shares hardly ever appear to be this cheap. This implies that for every 51p invested, the investor essentially owns a corporation with £1 in assets!
These valuations might vary, and there are no assurances since this is the stock market, where money is constantly at risk. However, some risks are far more intriguing than others. Additionally, it has an excellent dividend yield of about 8.5% right now. The investors can get in at polymetal share prices that are close to record lows.
