Precious Metals Commodities

Subscribe to this blog

Strong Fundamentals Will Win

Tags: Silver Wheaton, Commodities, Metals, Silver, Silver Wheaton, Commodities, Metals, Silver, Silver Wheaton, Commodities, Metals, Silver, SLW
9 May 5:57am
Posted by fullmetal
8 Comments

Silver Wheaton Corp.

SLW (NYSE)

Forecast has expired Ended: Monday May 28, 2007

Target

$12.00 and above

$2.14 (21.7%)

Time Span:6mths and above

Final

$11.35

$1.49 (15.1%)

Recommendation

Rating:Strong Buy

Risk:Moderate

Stop Loss Price:$5.00

Final XP: 0

Target not reached

Analysis

I went and did a bit more research into the metals commodities trade, held on to my Silver Wheaton (NYSE: SLW), and having calmed my nerves, I have some renewed confidence in my belief in SLW as a solid company. When watching the recent ghastly drop of their price within the past month, we have to remember:

More about silver

Silver Wheaton is 100% silver, and silver is a simple commodity. Keep in mind that there are key links between commodities prices, inflation and interest rates. When the market fears news of inflation, the commodities market is usually the first place to jump into for safety. The logic here is this: if the dollar is losing its value (eg: inflation is rising), people want to hold safer assets such as silver and gold. The flip side is that as the commodities prices rise, it eventually impacts the core inflation rate. In return, when the Federal Reserve notices this, they increase interest rates to try and regain control of the situation. A little difficult to comprehend? Well just remember that increasing interest rates tend to calm down inflation and commodities prices. This past Wednesday, the Labor Department indicated that the Consumer Price Index rose 0.6 percent, the biggest jump in three months, following an already strong 0.4 percent advance in March...a good indication that interest rates may continue to rise in the near future.

Recovery is inevitable

Having said that, I think silver prices will recover and the major sell offs occuring are from panicky or fickle minded investors who are not looking at the long term profitability of this company itself. As I said before, there has been no bad news from SLW itself to justify the stock price slide - I derive all of it's price woes on a temporary industry downturn. Think about it, interest rates can't keep hiking forever right?

Why I think Silver prices will recover

Empirically speaking, May and June are normally correcting months: a cooling off/consolidation period before another climb. Also, as of 2004, it was the 16th consecutive year in which Silver demand exceeded supply. This trend looks like it's going to continue with rumours of Bolivia threatening to lower their silver production. (see news article here ). Even if demand dies down a bit (which I highly doubt), the limited supply will always serve to keep prices steady. Let's keep an eye on what the Feds think, they're meeting again June 28-29. Fingers crossed if you know what I mean. Again: Silver Wheaton is 100% silver. Unlike gold (which is basically a hunk of metal used to store value), silver is both a valuable metal and used for various industrial purposes. I thought SLW was cheap at $11, but now at $7.50 it looks positively amazing.

Update:
It's 20 days left... and 1 cent off!  So close.
Read the rest of this forecast

Silver Wheaton Soaring

Tags: Silver, Silver Wheaton, Commodities, Metals, SLW
10 Nov 3:21pm
Posted by fullmetal
0 Comments
Silver Wheaton just reported their latest Q3 earnings a few days ago with excellent results.  Their profits have more than tripled since last year, after selling 3.5 million ounces of silver during the quarter.My bullish position on them still stands, and they look to be well on track to hitting the $12 target I set for them a few months back.  Just recently, I read a great article from Seeking Alpha which also builds a good case for SLW:  Silver Wheaton: The Minor To Own. ...
Read the rest of this story

Precious Metals

Tags: Silver Wheaton, Silver, Metals, Commodities, SLW
10 Nov 3:09pm
Posted by fullmetal
0 Comments
I'm no expert in the precious metals mining industry, but Silver Wheaton caught my eye recently. They are the only company that derives 100% of their revenue from silver production, and are owned by Goldcorp (NYSE:GG), who do gold production and exploration. Besides jewellery, silver is used in many other applications, including heavy use in photography, electric conductivity, and dental fillings. Their most recent Q1 report seemed too good to be true: - they beat analyst estimates of $0.06 p...
Read the rest of this story

Silver "Rollercoaster" Wheaton

Tags: Silver Wheaton, Commodities, Metals, SLW
16 May 2:22am
Posted by fullmetal
0 Comments
SLW has undergone an inexplicable slide since April.. from $11.68 at it's highest now down to $8.89! I know, silver prices have been falling (see this article) and metals stocks have been falling across the board. But besides that, there's really been nothing bad coming out of Silver Wheaton itself. The only significant thing that's happened is that they've recently moved to the NYSE, a good thing (although minor) I suppose. Does any of this explain a 20+% drop in price within the span of a fe...
Read the rest of this story

Precious Metal Royalty Interests?

Tags: Royal Gold, Gold, Precious Metals, RGLD
19 Apr 8:00pm
Posted by fullmetal
1 Comments
This is an interesting one.. I thought that Royal Gold was a gold mining/exploration type company. I took a look at their financials and Woah! a 93% Gross Profit Margin from a mining company? Then I looked a little further, and it turns out that all they do is: - seek to acquire precious metal royalty interests - finance projects that give potential royalties In fact, it seems like they have nothing to do with actually physically mining stuff.. no problem with me though! Their current price (3...
Read the rest of this story