Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Seven Key Words That Explain "Stupidly High" Bond Market Prices - 23rd Aug 19
Is the Fed Too Late Prevent A US Housing Bear Market? - 23rd Aug 19
Manchester Airport FREE Drop Off Area Service at JetParks 1 - Video - 23rd Aug 19
Gold Price Trend Validation - 22nd Aug 19
Economist Lays Out the Next Step to Wonderland for the Fed - 22nd Aug 19
GCSE Exam Results Day Shock! How to Get 9 A*'s Grade 9's in England and Maths - 22nd Aug 19
KEY WEEK FOR US MARKETS, GOLD, AND OIL - Audio Analysis - 22nd Aug 19
USD/JPY, USD/CHF, GBP/USD Currency Pairs to Watch Prior to FOMC Minutes and Jackson Hole - 22nd Aug 19
Fed Too Late To Prevent US Real Estate Market Crash? - 22nd Aug 19
Retail Sector Isn’t Dead. It’s Growing and Pays 6%+ Dividends - 22nd Aug 19
FREE Access EWI's Financial Market Forecasting Service - 22nd Aug 19
Benefits of Acrobits Softphone - 22nd Aug 19
How to Protect Your Site from Bots & Spam? - 21st Aug 19
Fed Too Late To Prevent A US Housing Market Crash? - 21st Aug 19
Gold and the Cracks in the U.S., Japan and Germany’s Economic Data - 21st Aug 19
The Gold Rush of 2019 - 21st Aug 19
How to Play Interest Rates in US Real Estate - 21st Aug 19
Stocks Likely to Breakout Instead of Gold - 21st Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 21st Aug 19
WAYS TO SECURE YOUR FINANCIAL FUTURE - 21st Aug 19
Holiday Nightmares - Your Caravan is Missing! - 21st Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

The Best "Bargain" Silver Mining Stocks to Buy Now

Commodities / Gold and Silver Stocks 2013 Jun 21, 2013 - 01:37 PM GMT

By: Money_Morning

Commodities

Tim Melvin writes: Precious metals related stocks have been under selling pressure all year, but smart investors are having a field day scooping up some of these best "bargain" silver stocks to buy right now.

Companies that mine gold and silver have seen their stock prices punished as the metals' prices have declined. So far this year gold is down 18% while silver prices have been punished even more severely, falling 28%.


The metals had experienced a multiyear strong run as fears of contrary instability and potential inflation drove investors into metals and miners alike. As the economy has shown signs of stabilizing and inflation concerns remain subdued, the rally has stalled.

The mining stocks have been hit even harder as marginal capacity became too expensive to maintain and profits fell sharply.

Now we appear to have reached an unsustainable condition in the price of silver mining stocks.

The total cost of producing an ounce of silver is estimated by some analysts to be as high as $24 an ounce. When this happens marginal capacity is forced out of the market place as higher cost mines are simply shuttered rather than run at a loss. Plans for expansion or exploration are delayed or eliminated and the level of production decreases.

We are seeing this in silver right now.

Although first-quarter silver production was up slightly year over year, it was down compared to the fourth quarter of last year.

Eventually the production decline puts in a price floor for the metal and demand will once again exceed supply. When this happens the surviving silver mining companies should do very well.

Silver mining stocks may face additional pressures in the short term but as marginal capacity is phased out supply reductions should lead to higher metal prices and higher profits. It may take some time for this to begin but it appears that that silver mining stocks are now cheap enough when compared to their asset value to represent a long-term bargain.

Of course if we get any signs of inflation or geopolitical unrest metal prices and stock values could increase much faster than anticipated.
Three "Bargain" Silver Stocks to Buy Now

The first on our "bargain silver mining stocks to buy now" list is one our own analyst David Mamos recently profiled...

#1 Bargain Silver Mining Stock to Buy
Coeur Mining Inc.(NYSE: CDE) is the largest silver miner in the United States. Although the company owns mining properties in Latin America and Australia, it has focused on domestic operations to escape the political risks often associated with mines in foreign countries.

As Mamos explained earlier this week, the key to Coeur profits is in the company's most proven mines and their future prospects. The company has a number of mines posting strong productions results expected to increase in 2013.

The company is in good shape with a strong balance sheet and has been reducing costs to offset the falling price of silver. Management has also been taking advantage of the current low stock price to buy back shares at less than tangible book value.

The stock currently trades for just 60% of its book value and is still profitable in the current tough marketplace. Any firming of silver prices should cause the shares to rally sharply back towards the 52-week highs in the low $20s. [Here's the full recent analysis of Coeur.]

#2 Bargain Silver Mining Stock to Buy
Hecla Mining Co. (NYSE: HL) trades for just 90% of tangible book. The company is primarily a silver miner but also produces zinc, lead and gold.

Hecla just took advantage of weak industry conditions to purchase a third mining operation and that will increase gold production levels going forward. Gold production should be 39% of the total for the rest of the year with silver at 38% and the balance consisting of lead and zinc.

The company has very little long-term debt and is financially strong enough to weather the current market disruptions. The company was founded in 1891 so swings in the gold and silver markets are not a new experience for Hecla and its management.

#3 Bargain Silver Mining Stock to Buy
Pan American Silver Corp. (Nasdaq: PAAS) has operations in the United States and Latin America. The company mines copper, zinc and gold in addition to its core silver mining operations.

In spite of falling metal prices and rising costs the company has been able to generate cash flow in excess of its costs and has been using the cash to reward shareholders. Management recently hiked the dividend by more than 150% and the stock currently yields 4.22%.

Pan American also has a very strong balance sheet with more than $500 million of cash on hand and very little long-term debt. The company has lower mining costs per ounce than many of its competitors and this should give it a competitive advantage in the difficult silver market.

Source :http://moneymorning.com/2013/06/20/the-best-bargain-silver-mining-stocks-to-buy-now/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules