NEW YORK ( TheStreet) --The rollercoaster ride that has characterized precious metals markets this year continues, with silver prices hitting recent highs above $25 before heading lower.This volatility has extended to silver-streaming company Silver Wheaton ( SLW) as well, which is trading nearly 30% lower on the year, even after its rally during the summer months. But as the broader metals market attempts to stabilize, the stock's weakness has run its course and long-term opportunities can be seen at current levels. So, while we have seen some major declines in the company's year-over-year earnings, there is mounting evidence that the worst days are behind us and that Silver Wheaton is positioned once again to start producing the stronger earnings numbers seen in the past. During the second quarter, Silver Wheaton's production rose to a record at 8.6 million silver-equivalent ounces -- a yearly increase of nearly 30%. Rising productivity, however, failed to generate similar increases in sales. Annualized sales were only higher by 4% for the period, coming in at 7.2 million ounces. But where Silver Wheaton really establishes itself as a industry leader with its streaming model is in its ability to keep silver costs low, at an average of $4.14 per ounce.
Going forward, an improving global economy is expected to lead to rising demand for silver, as its broad industrial applications far outweigh those of gold. This will help Silver Wheaton command higher prices and limit any downside that might be created by reduced incentive to buy metals as a safe haven. Silver Wheaton now trades at 17 times earnings, and with silver markets showing continued signs of strength, there is significant potential for upside in the stock. Key developments to watch include the production timetable at the Pascua-Lama mining project, which is Silver Wheaton's most important gold investment. Delays here could create an added drag on the company's performance, but Silver Wheaton has made sufficient arrangements to be compensated for missed deadlines.