Mining Sector Ideas

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>>> 8 Silver Stocks to Consider If Gold Isn’t Your Thing


InvestorPlace

Vince Martin

July 17, 2020


https://finance.yahoo.com/news/8-silver-stocks-consider-gold-165154789.html


Gold has moved to an all-time high, and many gold miners have rallied in response. But, somewhat quietly, silver stocks have gained as well.

A move higher in the underlying commodity no doubt has helped. Indeed, save for a brief move last year, silver trades at its highest level in almost four years. And there’s a case that silver stocks should continue to rally and potentially outperform its more valuable and more widely-held counterpart.

To be sure, the setup for gold at the moment seems almost perfect. The coronavirus pandemic adds risk worldwide, and can lead investors to the safety of the yellow metal. A ballooning federal deficit, along with interventions by the Federal Reserve, raise the specter of inflation — another bullish catalyst for gold.

But silver and silver stocks, can benefit for similar reasons. Indeed, they have: silver has rallied some 65% from March lows. Meanwhile, silver can get a boost from industrial demand as well, meaning it might outperform if the global economy manages to recover. Electric vehicles and solar panels both require silver, which could drive demand in coming years as well.

At the least, precious metals investors can look to the group for diversification. For those investors, here are eight silver stocks that deserve at least a long look:


Pan American Silver (NASDAQ:PAAS)

Endeavour Silver (NYSE:EXK)

MAG Silver (NYSEAMERICAN:MAG)

Fortuna Silver Mines (NYSE:FSM)

Wheaton Precious Metals (NYSE:WPM)

Silvercorp Metals (NYSEAMERICAN:SVM)

First Majestic Silver (NYSE:AG)

iShares Silver Trust (NYSEARCA:SLV)


The simplest play among silver stocks is to go with the biggest play. As far as U.S.-listed names go, that’s Pan American Silver.

Pan American admittedly isn’t the world’s largest producer. That honor goes to Mexico’s Fresnillo plc (OTCMKTS:FNLPF). In fact, despite its name, Pan American isn’t even a pure-play silver stock.

Revenue recently has been tilted more toward gold. But last year’s acquisition of Tahoe Resources added substantial silver reserves, Tahoe’s Escobal mine is the world’s second-largest.

After that deal, almost half of reserves come from silver. But regardless of where its revenue has come from, PAAS stock is a winner. The stock has rallied over 300% in the last five years, far outpacing gains in silver or gold.

That’s what miners are supposed to do: outperform the commodity when it rises. But as I’ve written relative to gold miners like Barrick Gold (NYSE:GOLD), the industry often has failed to provide that leverage.

The fact that Pan American has delivered on its promise makes it a solid pick for silver bulls going forward. The diversification of the portfolio, and industry-leading all-in costs, provide downside protection as well. As far as long-term, “set it and forget it” picks in the mining space go, PAAS is at or near the top of the list.

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