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Silver Wheaton Corp. Message Board

  • chemaes44 chemaes44 May 12, 2010 8:25 PM Flag

    Analyst's have figured it out yet

    Over the many years, or many qtr's I've owned SLW, here's what you need to get use to:

    SLW gets silver from some almost dozen mines. Anytime the price of silver goes up, the mines focus on lower grade ore's to optimize the high silver prices. Then, when the silver prices drop, the mines tend to go back to higher grade ore's.

    This contributes greatly to the ups and down's of their production. Further, there is always a missed shipment. I would guestimate 80% of the last dozen or so qtr's have had missed shipments carrying over into the future qtr.

    I personally believe that SLW is a completely new beast that analyst have not wrapped their mind around yet. I believe their (analyst)projections should by now treat this royalty company differently than a mining company by factoring in missed shipments and the variability of moving from low grade ore to high grade ore from the dozen or so mines slw gets their metal from.

    Unfortunately the analyst haven't gotten their minds wrapped around this yet, because they always seem to miss. I believe SLW is hitting their target, this is how their model works--missed shipment and high/low grade production.

    In all the years I've been holding SLW, I do not remember a single day like today where I heard silver mentioned maybe a few times per hour on CNBC. Funds are rotating out of oil because Cushing is full and they are pushing cash toward PM's. You can see the rotation if you watch during the day.

    Good luck
    chemaes

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    • Analysts understand this company. Do you actually think that they don't get it but you do? Come on, it really isn't that difficult.

      Like all companies they are looking toward future profit potential. Listen to the conf call.

      They understand, you aren't the only one.

      SM

    • I don't think its the analysts who haven't figured out the number of ozs, its the SLW mgmt. Why can't they figure out the delays, mining particulars, etc and factor that in to their estimates?

      And if a shipment is delayed one qtr, it should show up the next qtr and then that qtr should exceed. They have never exceeded. The delayed shipment never shows up. Shame on SLW mgmt.

    • As i said yesterday - if long, better be hedged. 20/21 puts or sell some calls.

      Over 70 million shares the last few days barely moved us. If the hot money leaves the pm sector could see $19 by the weekend. My sense(guess)is the metals may surprise everyone. Hang in there...not like the old days.

      Remember - silver was $18.40 on tues - gold - $1200.

      I'm long slw...hedged and will reload later.

      Most interesting pm chart out there. Have watched it for years. PM stocks....no respect. With this ramp xau/gold still hasn't gotten over its 200 dma? Amazing. Used to be in the mid .20's. Can't get over .15? Know the pm etf's have sucked $ out of pm stocks but...whew.

      http://stockcharts.com/h-sc/ui?s=$XAU:$GOLD&p=D&yr=3&mn=0&dy=0&id=p22878724156

      Agree with chemaes, slw is a different model, always miss shipments. Our enormous leverage w/o the inherent expenses in the mining biz is why i'm here.

      Good luck

      p

    • <Anytime the price of silver goes up, the mines focus on lower grade ore's to optimize the high silver prices.>

      Actually, that isn't quite right.

      Silver is a byproduct of the main ore being produced at the mines they have an interest in. The mine owners base the bulk of their production decisions on their primary production mineral and other internal factors such as mine optimization, cash flow needs and contractual obligations, not on the price of the silver biproduct which has to be sold in large part to SLW at a predetermined fixed price.

      For example, at the Zinkgruvan and Yauliyacu mines are primarily zinc/lead producers with silver as a byproduct. Their owners are much more concerned with the price of zinc than they are with the spot price of silver since they are already bound by contract to sell production to SLW at a fixed price.

      Best of Luck...

      • 2 Replies to aurorium3
      • Thanks for catching that aurorium. I've mixed information between mining companies and royalty company SLW after too many years of conf calls. In the end, I got it completely backward for SLW.

        Typically silver rises as part of the commodity complex.ie lead, nickel, zinc etc.

        As a result, the mines SLW contracts with focus on the lower grade primary ores when commodity metal prices were higher and higher grade ores when commodity metal prices were lower. The mines have price models of Xzinc+Ysilver+Zgold=whatever is the most profitable to mine.

        On the conference calls, Barnes and his chief mining guy gargle out this sound bite religiously everytime, saying they have to wait for the mines to get through the ore body before they return to higher grade ores that will deliver more silver to SLW.

        In the end, the contracted silver, even if short delivered, has to at some point still be delivered to SLW to make it up. The problem is it can take some time for that catch up to occur and inevitably, other mines usually go through their shortfalls seemingly always resulting in SLW having one of its mines having to play catch up with the silver shotfalls. That is, with all the mines, the hot potatoin silver shortfall is always carried by one of the mines.

        Sorry if I caused confusion.

        On another note, where do I see SLW going? I see $22.80 silver shortly (within a month). Whatever that translates into for SLW.

        Chemaes

      • aurorium & chemaes thanks for your input. Newbies, be sure to read from the likes of chem, news, mac and even ydm (if you don't mind sifting thru a lot of other 'stuff'). It appears aurorium has some real knowledge to share with the board too.

    • where do you see the stock and the company going?

      • 2 Replies to MSDLEO
      • Where does he see the stock going?
        He/she stated bullish
        1. The quarter is missing a payment for 455,000 ounce
        2. There is a strong fund shift to PM
        3. Silver has gone mainstream lately...whether it be JP Morgan speculation or rich Europeans moving out of the Euro or inflation...

        Long-Term Sentiment Disclosure
        I own Pan Am Silver and they missed by 6 cents on the 10th...
        And like the author I own the warrants....he owns the B I own the US 2013

 
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