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YTD Returns: 152%
Silver Wheaton(SLW - Get Report) is a leading silver streaming company.
About 70% of silver production comes as a by-product from base metal and gold mines. Silver stream agreements give the company the right to purchase a percentage of future by-product silver production from a mine that it does not own or operate in exchange for upfront payment. The company does not incur any capex or exploration costs.
"I think if silver prices stay strong our production trends upwards significantly over the next three years. This year we'll have about 23 million ounces of production. If we make no more acquisitions our production is at 40 million ounces a year in three years time. So if silver prices stay where they are I think you'll see a general trend upwards in our earnings and cash flows,"
CEO Peter Barnes
The stock has been the biggest beneficiary of the rally in silver prices. Silver recently touched a 30-year high, sparking fresh interest in the precious metal. Bulls have been touting silver's industrial applications in addition to its value as a precious metal.
Silver Wheaton reported record earnings of $69.2 million, or 20 cents per share, in the third quarter, double the $33.6 million, or 11 cents a share, it reported a year earlier.
BMO recently upgraded the stock to an outperform from market perform and raised the price target to $46 from $40.
Barnes expects Silver Wheaton to raise production by almost 20% next year, and sales could get a further lift from higher prices. "Silver could go as high as $50 an ounce over the next three-four years ... and $30 easily in the next few months," Mr. Barnes, told