Silver Wheaton (SLW) Stock Declining Today as Silver Prices Fall

NEW YORK (TheStreet) -- Shares of Silver Wheaton Corp. (SLW) are lower by 5.09% to $19.41 in late afternoon trading on Monday, as mining stocks slump today due to the decline in silver and gold prices.

Silver for March delivery is down 2.50% to $15.63 per ounce, while gold for February delivery is down by 1.73% to $1,175.30 this afternoon.

Last week both metals finished the week lower with gold losing 2.2%, and silver losing 6%, MarketWatch reports. Analysts said the losses were related to the decline in oil prices and a stronger dollar.

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Since oil is the world's most traded commodity, other commodities can move in unity with it, MarketWatch added.

Gold is lower today, trading below the $1,200 mark, as volatility reaches an 11-month high. The gauge of 60-day volatility reached 18.1 on Tuesday, December 16, its highest level since January 10, Bloomberg reports.

"The overall environment is very negative for gold. The market will remain volatile as trading will be very thin for the next two weeks," a senior commodity broker at R.S. O'Brien & Associates told Bloomberg.

Oil is lower today following comments made over the weekend by Saudi energy minister Ali al-Naimi, who said the nation will maintain its oil production, and is considering an increase if it discovers a new client, MarketWatch reports.

Separately, TheStreet Ratings team rates SILVER WHEATON CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate SILVER WHEATON CORP (SLW) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and premium valuation."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SLW's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 15.20, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has slightly increased to $120.38 million or 1.43% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -30.49%.
  • SLW, with its decline in revenue, slightly underperformed the industry average of 3.6%. Since the same quarter one year prior, revenues slightly dropped by 0.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • SILVER WHEATON CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, SILVER WHEATON CORP reported lower earnings of $1.05 versus $1.65 in the prior year. For the next year, the market is expecting a contraction of 27.6% in earnings ($0.76 versus $1.05).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 94.2% when compared to the same quarter one year ago, falling from $77.06 million to $4.49 million.
  • You can view the full analysis from the report here: SLW Ratings Report

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