Wheaton Precious Metals Corp (WPM)

[investora2z]

The stock has rebounded from recent lows by around 10%. Most other precious metal stocks have behaved in a similar manner after the sharp fall in June. Streaming companies may have been affected to a lesser extent by the crash in precious metal prices, but the impact cannot be totally ignored. The low risk model helps build some support amongst the analysts at these levels. Silver Wheaton has also increased its exposure to gold to balance its business model recently. The overall outlook for the sector is gloomy, and the break of previous lows has dampened the sentiments. The current bounce needs to hold for many days, and stocks like Silver Wheaton have to rise by another 10% to improve the sentiments. The good part is that the levels are so low that many astute investors are getting more positive on the sector. Respected names like George Soros, Jim Rogers and Jim Grant are getting more positive. Jim Rogers had stated in an interview in May that he would by gold if it touches $1300, and buy more if it touches $1200. Marc Faber had stated that a bounce in gold prices would lead to a stronger bounce in the mining stocks. Further, the prices have already corrected a lot over the past several months, and are below the cost of mining now. This may lead to some adjustments in the supply-demand balance. The valuations are extremely cheap with most companies trading below book value and development stage assets like Pershing Gold (PGLC) trading at a discount to potential. No one can pick the bottom, but it is possible that that is not far from here. Stocks like Silver Wheaton are likely to be preferred in case of a rebound. However, the prices need to stabilize asap to avoid further damage to sentiments.