Having risen by 55% in the last four months, Sirius Minerals PLC (LON:SXX) (SXX.L) may now be more widely known among the investment community. After all, any stock which moves sharply up or down in a short space of time often finds itself coming under the scrutiny of a larger pool of investors.
In my view, though, little has changed regarding the prospects for the company. It has moved ahead with its strategy in recent months, but there has been no piece of news flow that I feel can fully explain why it has performed so much better in the last four months than it did in the four months prior to that.
Looking ahead, I wouldn’t be surprised if there is more capital growth ahead for the Sirius Minerals share price. The company still looks cheap to me, given its future growth prospects.
For instance, it continues to have a strong position within what could be a growth industry. World population growth is due to see the number of people on earth rise from 7.2 billion today to almost 10 billion by 2050. As a result, demand for more effective forms of fertiliser could rise.
With Sirius Minerals seeming to be in a good position to generate strong sales and profit according to its forecasts, it could offer further growth potential. An NPV of around 230p suggests that it may still be inexpensive even after its share price rise, but this does not necessarily mean it will be a smooth run to a higher stock price.
More volatility could be ahead, with investor sentiment having the potential to change quickly and without warning. In the long run, though, the stock could offer significantly more upside in my view. It seems to have a solid strategy and an appealing valuation should it continue to deliver on its strategy.