By SD Contributor SRSrocco:

While it is true that the gold & silver miners have underperformed the bullion… I believe we are going to see a different story in these stocks in the next several years.  Right now, you can’t give the da*n things away.  Of course, it’s not as bad as the end of 2008… early 2009, but the sentiment is pretty bad.

I believe the gold and silver miners have been hammered… yes.  I disagree with many of those on KWN that the stocks are way UNDERVALUED… they AIN’T

I believe the stocks are being properly valued to the price of the metals… however, we all know the metals are manipulated.
Once we start to see the revaluation of GOLD to some trade settlement backing and we have a devaluation of the dollar, there will be a huge run into precious metals… probably before hand as well as the stocks.
Money will have to flow into gold and silver stocks.

Silver Bullet Silver Shield Slave Queen Collection  at!!

Slave Queen 2

I wanted to show why I believe certain of the SILVER MINERS are holding up rather well.  First, lets take a look at a comparison of several of the silver miners to the SLV:

You will see that First Majestic has done the best out of all the primary silver miners.  Second place goes to Endeavour, followed by Couer and then Fortuna.  Only First Majestic and Endeavour actually did better than the SLV in the past 2 years… however, Couer and Fortuna at least kept almost even with the SLV.

So, why are these miners doing better than the others.  The bottom three are Hecla, Pan American Silver and Silver Corp.  If we take a look at the last nine months of 2012 OPERATING EARNINGS RATIO…. we can see a very interesting comparison.

Three of the top four silver miners according to their operating earnings to revenue ratio, were in the top four in the chart above.  First Majestic was number one, Endeavour was number two, and Fortuna was number four…. as in standings in the chart above.

We can clearly see that their operating earnings to revenue ranking put them in order in how they have performed in their stock price.   Of course, this is not an exact science…. but it does help understand why some of these silver miners are doing better than the others.

Investors want stocks that are going to show good earnings as well as increased reserves and production.  Even though Pan American had decent operating earnings, its annual production has declined since 2009.  On the other hand, Couer has actually increased its production from 16+ million ounces in 2009 to 19-20 million ounces in 2012.

SilverCorp is another matter.  They actually have excellent operating earnings ratios, but this ongoing problem with the NEGATIVE PRESS has killed their stock price.  I have not looked too deeply into SilverCorp, but sometimes it is very difficult for whatever reason to break away from BAD PRESS.


SD Bullion

  1. I swallowed my pride and sold silvercorp for a deep loss. There is something not right about this company.
    Compare the photo’s on the website with First Majestic and decide which company you would rather hold.

    • To address the thing about SilverCorp:  The market has always thought something fishy there.  Anytime you compare it with say EXK, or PAAS or SSRI, the technicals look SICK.  I have been in many dust-ups over SVM, but if the market thinks something is wrong with the stock, I think in the long term it will come out.  Far as I am concerned, and the market is as well, the technicals are sick, it seems like it should be a great stock on the surface, but it never works out……go figure.
         When I investigate SVM and their connections, and alledged or proven bribes and local gvt corruption, a fact in China, I just can’t be sure of much and won’t put my or my clients moneys in it, with the uncertainty.
      For my money, AXU is a far better speculation, as I dont see SVM as a producer but rather a speculation. Probably the Global ETF Silver Miner SIL is the real deal, I like the way it moves.
      The fundamental analysis of SVM is always so great, but the stock seldom justifies it.  Sad.

  2. I’m holding on to my Silvercorp, EPS are forecast to more than double next fiscal year with $30 silver. If/when silver gets back into the $40 range it will help out the EPS even more.

    The fundamentals of Silvercorp are awesome, they’re just getting attacked by a criminal shorting group EOS funds headed by Jon Carnes with bad press. In the end it’s all about growth and earnings.

    I found this on another board, again, it’s all about the fundamentals .

    SVM Fiscal Year 2014 At A Glance 
    (SVM’s fiscal 2014 starts March 31’st 2013)

    Production is forecast to increase 64.4%. 

    -Production is increasing from 5.9 million oz (FY 2013) (March 31, 2012 to March 31, 2013) to 9.7 million ozs for FY 2014 ( March 31, 2013 to March 31, 2014) 

    Operating cashflow is forecast to increase 55% or $88MM 

    -Operating Cashflow FY2013: $160MM ($30 oz Silver)
    -Operating Cashflow FY2014: $248MM ($28 oz Silver)

    Capital Expenditures are forecast to drop -54% or $41MM 

    -Capital Expenditures FY2013: $90MM 
    -Operating Cashflow FY2014: $49MM 

    Keep in mind SVM’s fiscal 2014 starts March 31’st 2013. 

    -EPS FY2013: .28 (Est)
    -EPS FY2014: .59 (Range of .46-.77 EPS) 

    Almost a 100% increase in earnings year over year projected, probably the highest or one of the highest silver stock growth rates for all the miners for 2013-2014

    Also, keep in mind they are one of the few miners to reduce their mining cost, I think I saw a projection of around 30% cost savings for the new method SVM is rolling out.

    • SVM has great potential but seems to have some lunatic fringe intent on discreditting it, first with that Alfread Little insanity, now with this B.S. lawsuit.
      Two of my favorite up and coming silver junior producers are first USA Silver and then Silvercrest. USA Silver is a sleeper and will explode with higher silver prices as it is more leveraged to rising silver prices (high cost, high volume Idaho producer) than any other silver. Im counting on it to be my FR of 2013 (write-off year 2012 had no FRs)

  3. “Compare the photo’s on the website with First Majestic and decide which company you would rather hold.”
    I don’t think picking stocks based on company website appearance is a wise way to invest.  Appearances are very often deceiving, and they appeal to the emotions most of all, not logic.  Look at the website for Central Fund of Canada.  It looks like something from the early days of the Internet.  Yet CEF has been the most consistent top performer over the current precious metals bull market, because of its split between 50% Gold and 50% Silver holdings.  If people only decided to own CEF based on their website, they would have missed out on the best form of savings and wealth preservation over the last 12 years, and counting.
    I believe SilverCorp has received bad press because they are under attack for being a China-Silver-Mining based company.  I think the China connection is why they have been singled out the most.

  4. I see everywhere sellers of air and empty paper promises “about of silver.”
    I will never, ever, ever want and will not buy any of magic papers “about of silver” on the stocks market. I always buy only the physical metal. Stock market – this is a big bubble. And stock papers “about of silver” – is part of this big bubble.

    • That’s OK, Silvermail.  That paper silver can be bought with counterfeit fiat currency, so it’s basically like begetting like.
      I have invested in a number of PM ETFs and have made some good money in them that was immediately converted into phyzz.  The SIVR and PPLT ETFs have been especially good but the PALL ETF is looking like it wants to deliver additional money into my account. 🙂

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