Southstone Minerals Limited (SML.V) started trading again after a two year halt. It rose 67% and closed at the high of the day at $0.05 for good reason. While it has been halted, it completely turned around its business which included 1.5 cent EPS for the past nine months and 0.9 cent EPS for the previous quarter. This stock is flying under the radar thanks to the halt and should be trading north of $0.10. Those who buy in now are getting an opportunity for easy profits. If you like our picks you can also follow this blog by clicking the follow button on the top of the left hand panel. We have 132 followers so far on here as well as 1,039 followers on our ValueTrades blog. You can also follow us on X @StockTradePicks which has over 5,000 followers.
SML produces diamonds from its Oena Mine in South Africa. Here is a snapshot of its income statement:
The financial performance is accelerating with $1.2 million in gross profit on $6.5 million in revenue for Q3. This represents about 5x growth from the previous year and nearly half of the revenue for fiscal 2026. The result is a 1.5 cent EPS for the first nine months of the year, but 0.9 cent EPS just for Q3. This implies an annual run rate of close to $0.04 EPS. Under these circumstances it's understandable why buyers would be interested in buying throughout the day until it hit its day high at close. With the two year halt, investors have forgotten about this stock while there might be some cheap shares on the ask from people who haven't followed the incredible progress and are just happy to get liquidity.
A diamond mining operation is difficult to value. But we think with a $0.04 EPS annual run rate and a $0.015 actual EPS over the previous nine months, the stock should be a minimum of $0.10 and up to $0.40.
Disclosure: We are long SML.V
