NEW YORK (TheStreet) -- Silver prices have gained 7% during the past three months. This compares to a 3.5% drop in S&P 500 index. This up move in silver prices has had a positive impact on silver miners.
Two such silver stocks,
Both Silver Wheaton and Pan American Silver have gained 23.6% and 12.9%, respectively, during the past three months.We hold a bullish view on the outlook of silver prices and the growth prospects of these companies. With the ongoing uncertainty in Europe, coupled with a lack of direction in the equity markets, we reckon that investors will look to park their money in safe havens like silver. This trend has been reflected in the exchange-traded funds, which have witnessed an uptick in activity. During the last three months, silver holdings in iShares Silver Trust (SLV), the largest ETF backed by silver, have declined by 2%, to 9,258 metric tonnes. Meanwhile, the ETF has gained 6% during this period. According to GFMS, London-based metals consultancy, both industrial and investment demand would witness a double-digit growth this year, boding well for silver prices. The consultancy said that total investment in silver was up by 184% year-over-year to 136.9 million ounces during 2009. Industrial demand, which declined 20.5% year-over-year during 2009, is also expected to improve, as there has been very little restocking done by companies, despite a recovery in the global economy.
Silver WheatonShifting focus to the stocks, Silver Wheaton derives more than 95% of its revenue from the sale of silver. The company reported its results for the first quarter ended March 2010 on May 12. Net income more than doubled to 13 cents per share from 6 cents per share a year ago. Revenue soared in excess of 100% to $85.9 million, driven by a 40.2% increase in total silver ounces sold to 4.4 million. Moreover, average cash cost remained flat at $3.97, while average realized price surged 45% to $17.27.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV