How to buy, sell and short Sirius Minerals shares
Sirius Minerals is a leading fertiliser development company, recently burdened by bankruptcy rumours and a dwindling share price. Learn more about Sirius Minerals and find out how you can take advantage of changes in the company.
How to buy Sirius Minerals shares
If you want to buy Sirius Minerals shares, you can choose between owning the physical shares or going long on the share price with deirvatives (CFDs or spread bets). Share dealing enables you to buy and own Sirius Minerals shares, while derivatives trading lets you speculate on price movements without owning the shares.
Many people choose to trade derivatives because you can:
- Trade on margin: margin enables you to open a position with a small deposit. This can magnify your profits, as any gains on your position will be calculated from the full exposure of the trade, not just the margin you put up as deposit. Note that your losses could also be magnified
- Enjoy tax benefits: spread betting is completely tax free and there is no capital gains tax (CGT)1. CFDs are free from stamp duty, but not exempt from CGT1
- Get more flexibility: derivatives trading is much more flexible, as you can go short or long. You are speculating on the direction in which an asset’s price will move, rather than buying the asset itself
- Hedge your positions: you can protect against unfavourable market movements by hedging your positions. This enables you to hold two or more positions at the same time with the intent of offsetting any losses from the first position with gains from the other
Investing in Sirius Minerals shares
If you want to invest in Sirius Minerals, you can use the IG share dealing service. Simply open a share dealing account and follow the steps below:
- Log in to your share dealing account
- Search ‘Sirius Minerals’ in the ‘finder’ panel
- Choose a deal price and enter the number of shares you want to buy
- Buy the shares
After you’ve successfully bought the shares, they will appear in your IG account. Any rise or drop in the share price will also reflect in the account. IG will pay any dividends due to you directly into your share dealing account.
Trading Sirius Minerals shares
If you want to trade Sirius Minerals, you can use derivatives such as CFDs or spread bets. You can buy (go long) if you think the Sirius Minerals share price will go up or sell (go short) if you think the share price will go down. To buy, follow these easy steps:
- Log in to your trading account
- Search for ‘Sirius Minerals’ in the ‘finder’ panel
- Choose your position size
- Select ‘buy’ in the deal ticket and confirm the trade
Understanding Sirius Minerals: a brief history
Sirius Minerals was founded in 2003, and it listed on the London Stock Exchange (LSE) in August 2005. The share price at the time of listing was 6.5p. Originally, the business was focused on mining potash in the American state of North Dakota, but this shifted in 2010 when chief executive officer (CEO) Chris Fraser announced his interest in mining in the UK.
Fraser was introduced to Peter Woods and Rick Smith, who first discovered polyhalite in North Yorkshire. And so, in 2011, an application was submitted to the North York Moors National Park Authority to start drilling at its location. By mid-November, the share price had rocketed to 32p.
In September 2013, Sirius Minerals had to put its plans on hold to re-evaluate the project’s environmental impact. The share price dipped to 7p by November of the same year. The company resubmitted its plans the following year, but they weren’t approved until June 2015. As a result, shares were finally approaching the 20p mark again.
Construction and mining started while Sirius Minerals was making plans to get all the capital it required. However, it ran into some trouble in 2019 when it postponed the sale of a $500 million bond, causing the share price to plummet by 39%. This development has cast doubt over the future of the North Yorkshire project.
Sirius Minerals shares: the basics
Sirius Minerals has had quite a tumultuous few months – with share prices dropping by roughly 85% from April to August 2019. The share price is largely driven by the status of the North Yorkshire mining developments as it has been struggling to raise the funds it needs for the project.
Sirius Minerals key personnel: who manages the company?
Sirius Minerals has five senior executives that manage the company.
|Chris Fraser||CEO and managing director|
|Thomas Staley||Chief financial officer (CFO)|
|Simon Carter||Chief development officer|
|Nicholas King||General counsel|
|JT Starzecki||Chief marketing officer|
Sirius Minerals also has a board of non-executive directors, which consists of eight members and includes Thomas Staley.
What is Sirius Minerals’ business model?
Sirius Minerals’ business model is based on developing and delivering an industry-leading fertiliser product. The focus is on obtaining the world’s largest deposit of polyhalite from its mining project in North Yorkshire. The business aims to maintain long-lasting, low-cost production of its product to deliver the most value to customers, shareholders and other stakeholders.
The Sirius Minerals business model focuses on three key areas:
- Research, which proves that the use of polyhalite as a fertiliser is suitable for farmers
- Sustainable development, which considers risk management, safety and environmental care
- Sales and marketing, which aim to build a market for the product
Sirius Minerals fundamental analysis: how to analyse SXX
Before buying or selling Sirius Minerals, you should conduct thorough fundamental analysis. A business’s fundamentals include different factors that affect its operations, such as management structure and financials. Further to this, you must also investigate the health of the sector in which the company operates, and the overall economy. By gathering as much information as possible, you can make an informed decision about Sirius Minerals.
- Sirius Minerals’ EPS outlines the value of each share and whether the company is profitable or not. To calculate EPS, divide Sirius Minerals’ profit by the number of outstanding shares
- Sirius Minerals’ P/E ratio defines how much you must spend on shares to make $1 in profit. To calculate P/E ratio, divide Sirius Minerals’ current market value per share by its EPS
- Sirius Minerals’ ROE measures how much income it makes on assets compared to shareholder investments. To calculate ROE, divide Sirius Minerals’ net income by its stakeholder equity
- Sirius Minerals’ dividend yield compares the annual dividends to the share price. It is expressed as a percentage. To calculate dividend yield, divide the dividend amount by the share price, and then multiply it by 100
1 Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.