If you own shares in Pilbara Minerals Ltd (ASX: PLS), chances are you're feeling a little despondent right now.
This leading ASX 200 lithium stock has had a rough few months, to put it politely. At $3.60 a share at market close on Monday, the company is down 26.53% from the $5 a share levels we were seeing this time last year. Pilbara has also lost more than 30% since August. And that's despite the 8% share price rebound we've seen over the past week.
But of course, Pilbara shareholders would be used to some healthy volatility by now. After all, this is a company that has bounced between $3.20 a share and $5.43 in just the past 12 months.
The company's recent woes can probably mostly be attributed to the recent slump in lithium prices that have sapped ASX investors' confidence in most lithium shares. As we covered just last week, Pilbara's most recent quarterly update revealed that the company has had to endure a 50% decline in the prices it has been able to realise for its lithium products.
This has also led to speculation that Pilbara will have to cut its freshly-instated dividend. Last year, investors were delighted with Pilbara's maiden interim and final dividends, which added up to a 2023 total of 25 cents per share. However, fears that this might turn out to be a flash in the pan have probably dented investor confidence as well.
So with all of that in mind, it's not much of a surprise to see Pilbara's shares cropping up on the list of the ASX's most short-sold stocks in recent weeks (including this week).
Have we found a bottom for Pilbara Minerals shares?
However, not everyone is bearish on Pilbara Minerals shares as we get going with 2024. In fact, one fund manager still names Pilbara as one of its major holdings.
As reported in the Australian Financial Review (AFR) this week, Tim Carleton and Will Mumford of Auscap's Long Short Australian Equities Fund remain exceptionally bullish on Pilbara Minerals shares.
A quick check of the fund's January newsletter tells us that Pilbara remains comfortably within the fund's current (as of 31 December) top 20 stock picks.
Carleton told the AFR that it was "the fund's strict focus on quality operations that has the portfolio managers unperturbed by the short interest [in Pilbara stock]. Here are some more of his remarks:
We've been very pleased with them – just look how disciplined they look. They've been keeping all that cash on the balance sheet, recognising the cycle was going to be volatile… They're in a remarkable position … and there's a pretty strong chance that their Pilgangoora operation [in Western Australia] becomes the lowest-cost lithium mine in the world.
No doubt Pilbara investors will be delighted with that assessment. But, as always, only time will tell if Carleton is on the money with Pilbara.
