Wheaton Precious Metals Corp (WPM)

[sumisu]

Stock Of The Week

A Silver Pure Play

John Dobosz, 07.13.06, 9:30 AM ET

Curtis Hesler, editor of Professional Timing Service, recommends buying shares of Canadian silver company Silver Wheaton Corp. at $9 or cheaper.

The Vancouver, British Columbia company bills itself as the only publicly-traded firm that derives 100% of its revenue from silver production. It purchases production from mines in Mexico, Sweden and Peru, but does not do the mining itself. Hesler likes that this enables the company to operate with very little overhead.

Silver Wheaton (nyse: SLW - news - people ) expects to sell approximately 15 million ounces of silver in 2006 at cash costs of $3.90 per ounce. Silver currently trades around $11.50 per ounce, and traded as high as $14.94 on May 12. Even after the 23% correction over the past two months, silver is still up 30% year-to-date.

Shares of Silver Wheaton have been about twice as volatile as the price of silver, and so far in 2006, they have advanced 65%, and now trade at about $9.50. Shares were up as much as 101.4% on April 19 when they hit a high of $11.75.

Hesler believes that SLW will come back down below $9 before making a new run at its old high, so he advises using a "good-till-canceled" order with a limit of $9 or slightly lower.

“Even if it goes lower than $9, I’d try to steal a little more closer to $8,” says Hesler, who believes that silver's longer term prospects are still positive as long as the U.S. dollar remains in the downtrend it has been in since early 2002. Also bullish for silver is the physical need for the metal that has been brought on by the introduction in late April of the iShares Silver Trust (amex: SLV - news - people ) that tracks the price of silver and must be backed up by physical silver.

Hesler points out that silver has outperformed gold during the current bull market, up 366% from its low in November 2001 to its May 2006 high. Gold, on the other hand, moved 184% from April 2001 to its $725 per ounce high in May 2006. Silver also outperformed gold in the last metals bull market in the late 1970s that lasted until 1980.

http://www.forbes.com/2006/07/13/silver-wheaton-commodities-in_jd_0712gurusow_inl.html?partner=yahoo...