Opinions
Charles Oliver, HBSc CFA
Pan American Silver
PAAS-T
TOP PICK
Dec 11, 2013
$11.420
Stock price when the opinion was issued
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TOP PICK
Stockchase Research Editor: Michael O'Reilly We reiterate PAAS, the world's largest silver producer, as a TOP PICK. It operates facilities in Canada, central and south America. Aside from silver's many industrial uses, it also acts as an inflation hedge. Forward earnings project it trading at 13x earnings, compared to peers at 16x. It pays a reasonable (and growing) dividend, backed by a payout ratio under 20% of cashflow. We would buy this with a stop loss at $27.50, looking to achieve $52 -- upside potential over 62%. Yield 1.55% (Analysts’ price target is $49.29)
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TOP PICK
Stockchase Research Editor: Michael O’Reilly As the world's largest silver producer, we again reiterate PAAS as a TOP PICK. Operating facilities in Canada, central and South America it is well positioned and trading at good value and silver also acts as an inflation hedge. It pays a reasonable (and growing) dividend, backed by a payout ratio under 25% of cashflow. We continue to recommend a stop loss at $27.50, looking to achieve $48 - upside potential over 50%. Yield 1.65% (Analysts’ price target is $47.50)
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PAST TOP PICK
(A Top Pick Jan 19/22, Down 12.5%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with PAAS has triggered its stop at $27.50. To remain disciplined, we recommend covering the position at this time. This results in a net investment loss of 22%, when combined with the previous buy recommendation.
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New entrance in the trending stocks. Operates silver mines across the Americas. World's largest silver producer and holds largest silver reserves globally. Missed their estimated earnings by 50%. Lots of social media mentions due to the earnings report as well as investors wanting to get more exposure to commodities during the current geopolitical tensions.
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PAST TOP PICK
(A Top Pick Mar 04/20, Down 31%)
They had operational problems in Mexico, but they remain a major silver and gold producer. They just took over the Latin American operations of Yamana in tandem with Agnico; this will double their gold production. They have a warrant to reopen a mine in Guatemala, and might reopen. Gold and silver is the place to be.
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Nice solid balance sheet with about $380 million net cash. One of the largest silver producers with about 25,000,000 ounces a year. Not much growth in the short term, but they do have a project Navidad in Argentina, one of the world’s largest undeveloped silver mines. Unfortunately, Argentina is not a place you want to build but it sounds like winds of change may be coming. Yield of 4.46%.