Silver stocks are down at the moment, with value opportunities opening up in some of the biggest precious metals miners on the TSX. With higher silver prices expected later in the year, here are four bargains for capital gains investors looking for upside.
Down 12.45% in the last five days at the time of writing, Fortuna Silver Mines made one of the biggest moves of any silver stock on the TSX index this week. Possibly on its way to a 52-week low, Fortuna Silver Mines is down 1.38% on the day.
A negative one-year past earnings rate is mitigated by a five-year average past growth average of 58.9%, while a low debt level of 13% of net worth indicates a clean balance sheet. Valuation is attractive at the moment, with a P/E of 15.3 times earnings and P/B of 0.9 times book, while an expected 19.5% annual growth in earnings should interest growth investors.
Up by leaps and bounds since the last week of January, Silvercorp Metals is currently down 8.26% in the last five days. While this may well not be the case for very long, dips like this are the Holy Grail for precious metals investors bullish on higher silver prices later in 2019.
With a strong record (see a five-year average earnings growth of 53%) and clean balance sheet carrying just 1.1% debt, Silvercorp Metals is a stock to covet. It's currently undervalued with a 37% discount, P/E of 10.6 times earnings and P/B of 1.3 times book. Meanwhile, Silvercorp Metals investors can find out what it's like to be in the 1% - a dividend yield of 1%, that is.
A top silver pure-play stock, Wheaton Precious Metals reduces some of the risk of owning actual mining stocks by way of "streaming" - that is, by acting as an unhedged paper proxy. Down 6.11% in the last five days, this TSX index favourite saw year-on-year returns of 19.3%, and is hot off a one-year past earnings growth of 640.2%.
A healthy stock, Wheaton Precious Metals' level of debt to net worth has been brought down over the last five years, from 29.6% to the current 24.4% today. While its P/E of 24.5 times earnings is a touch high, this stock trading at twice book does offer a tempting dividend yield of 1.53%.
With a five-day drop of 6.13%, Pan American Silver pays a dividend yield of 1.08%, and is expecting an annual 37% growth in earnings over the next one to three years. Its P/E of 192.8 times earnings is a bad sign if you're a value-focused investor looking for the widest possible profit margin, though it's clean in the balance sheet department and saw a solid five-year average past earnings growth of 59.3%.
Is Pan American Silver the best silver stock on a dip at the moment? Carrying low debt of 1.8% and with a below-market P/B of 1.3 times book, it's certainly attractive. However, contrast Pan American Silver's positive outlook and a bit of inside buying with Wheaton Precious Metals' negative outlook in earnings and some inside selling in the last few months, and the streamer seems to have the edge.
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