The Motley Fool

Why Sirius Minerals plc is a growth bargain I’d buy and hold for 25 years

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

The time horizon of investors varies significantly. However, one thing which many appear to share is an impatience to generate profit from their investments. This is understandable, since it can be hugely frustrating when a stock price fails to rise as much as had been expected at the outset. Worse still, a falling share price and paper losses can lead to even more disappointment.

However, patience in underperforming shares can be significantly rewarded in the long run. One stock which could be a prime example of this is Sirius Minerals (LSE: SXX). The mining company has disappointed in recent months and is down almost 10% in the last six months. However, in the long run the company could deliver high returns.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Slow and steady progress

This year has seen Sirius Minerals make rather ‘slow and steady’ progress. Its operations have moved forward as anticipated, with the company’s Woodsmith Mine developing as expected. There have been offtake agreements signed as the business builds up its marketing capabilities ahead of first production in just under four years’ time. And with crop studies showing that the company’s polyhalite fertiliser could potentially perform better than other options, the Sirius outlook has remained positive throughout the year.


However, market sentiment has been downbeat of late and it seems that some investors are still unsure about the level of risk the company faces. For example, the project is still in its early days, and there are various risks which could lead to higher costs and/or delays to the first production start date. Furthermore, there is a lack of certainty on the company’s future success at marketing the product, nor is there complete clarity on pricing.


Despite these risks, Sirius Minerals seems to have high return potential. Further offtake agreements could be signed over the next few years which could help to build investor confidence in its outlook. Progress on further financing initiatives may also help to generate improving investor sentiment. And if the company’s project can remain on track, its forecasts for production volumes and profitability in future years may seem to be more realistic. This could lead to a higher share price in the long run, which is why the company could be worth holding for a sustained period of time.


While Sirius Minerals may look cheap after its recent share price fall, one stock which appears to be expensive is Spirax-Sarco (LSE: SPX). The industrial engineering company reported on Tuesday that the global macro-economic environment remains positive and that its sales growth in the four months to October increased modestly compared to the first half of the year. It expects industrial production growth rates to remain positive for the rest of the year and is on track to meet guidance for the full year.

Clearly, the update from Spirax-Sarco is generally positive. However, the company’s valuation suggests that it may be a stock to avoid at the present time. It is forecast to post a rise in its bottom line of 12% next year, but due to a price-to-earnings (P/E) ratio of 27 it seems to be relatively overpriced right now. As such, there may be better value elsewhere for long-term, patient investors.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story.

In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

Peter Stephens owns shares in Sirius Minerals. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.