A rise in silver prices has not caught the headlines mainly because its rival metal gold, has also been enjoying a decent rally, but that could mean that some silver stocks might offer some value to investors.
If you are an investor, you can always the check the progress on stocks and commodity prices by using data taken from Money Morning’s website.
Here is a look at some silver stocks to watch and the reasons why they might merit your consideration.
Set for a recovery
There is no question that commodities have gone through a few turbulent years with prices and values falling, and silver has not been immune to that downward trend.
Silver prices actually fell in 2015 to its lowest value in six years, which created trading pressures for silver miners and some unpleasant plunging valuations, if you were an existing investor.
Mining companies have been busy responding to these difficult trading conditions and have been making cutbacks and adjustments to their production measures. If you are an existing investor of some of these silver mining companies, you might be holding out and waiting for things to improve, but if you are looking to gain an exposure to silver, some of these companies could now be well positioned to enjoy some decent gains, when the silver price recovers its momentum.
Here is a look at some silver miners who could be worth looking at from an investment perspective in 2016, although you should make your own mind up whether to commit funds or not.
Silver Wheaton Corporation
This is an interesting one to start with, as Silver Wheaton is not actually a mining company.
It is actually a precious metals streaming company. What they do is provide funding to mining companies in exchange for the right to be able to purchase silver at a pre-agreed price at a later point.
The reason Silver Wheaton could be of interest to investors is that it is not directly involved with mineral exploration, which can be cost-heavy and risky. The way it is structured also puts it in a decent position to be able to negotiate favorable prices for future supply streams.
The bad news is that Silver Wheaton dropped by almost 40% in value during 2015, but conversely, this could mean that there is the potential for price growth as silver recovers going forward.
First Majestic Silver Corporation
The specific point about First Majestic is that it is a silver miner which is exclusively focused on production in Mexico, which means that it has been able to focus on improving production in mines that it is entirely familiar with.
As with many miners, they have worked hard to reduce their cost base and they have managed to cut their all-sustaining cost levels by a couple of points shy of 30%, which means that they are in a better position to profit from a rise in silver values and increased production levels.
A combination of reduced operating costs and a noticeable recent increase in production levels from new and existing mines, means that First Majestic could be well placed to show some growth in their stock value.
Silvercorp Metals Inc
One of the attractive aspects of Silvercorp’s business profile, is that it has mines positioned close to the largest consumers of the metal in the world, namely China and the United States.
This means that the company enjoys good demand for its silver and as well as having a number of mines already in China, they are also developing a mine in British Columbia, Canada, which should help strengthen their position.
The company has not performed well in recent times in terms of earnings, but that is no different to other miners, who have all experienced a very challenging environment.
What makes Silvercorp of particular interest is the fact they launched a stock-buyback program in 2016. These buybacks are generally perceived as a bullish statement from the company and an indication that they believe that their stock price is undervalued at the present time.
This move way well serve to attract new investors but it could also help to persuade existing stockholders to hang on for the ride and see where it takes them.
You may well decide that some of these companies offer you a chance to profit from an upturn in silver’s fortunes, or you could also consider the possibility of an ETF which provides you with exposure to a basket of miners as well as physical silver too.
Evie Jones has a background in finance and enjoys writing about the different options available when investing. Personally interested in the prices of gold and silver, she writes on these topics for investment and finance sites.
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