I'll take responsibility for today's drop. I've been watching this stock for some time waiting for a pull back to get in. I finally gave up this morning when I saw it rising after the open and bought in. It's been straight downhill since.
Hellow Omniportent. Thank you for the detailed response to my inquiry. The additional info at the end of your message is persuasive to hold SLW. I appreciate your sharing!
Omni, as usual, is the polite guy on the board and I'm the bad ass, lol, so here's my more blunt response ...
While the two silver flow arrangements to date are nice and give the company a good positive cash flow with which to grow, they were darn expensive ... let's remember that the company issued about 160 million shares and tens of millions of dollars to get those silver flows ...
Yes, we could possibly see another outside silver flow purchase but I suspect the focus will now be on developing those silver flows internally ...
For example, SLW owns 15% of BCM ... if BCM becomes a silver producer, then perhaps SLW can arrange that 15% of the silver produced comes to SLW at some fixed price ...
I also expect that we will see a JV with Goldcorp on some gold/silver properties whereby Goldcorp gets the gold and SLW gets the silver ...
Thus, it is still very possible to remain a "pure" silver play and remain true to the founding concept, and at the same time do so internally rather than through very expensive external purchases ...
Good trading ...
When Ian Telfer came up with SLW's business model he reduced the risks involved in running a silver company and virtually guaranteed that SLW would be highly cash flow and earnings positive. Unless silver prices completely tank to new lows, SLW will do well.
In an environment where future metals prices stagnate or struggle, I believe it will be possible to get more deals like the original Luismin and Zinkgruven purchase contracts. In a difficult environment, there will be lots of companies lined-up to sell their future silver production in exchange for an immediate return.
However, if silver moves forward strongly, as many of us suspect, it may be difficult to get more Luismin style deals. In a strongly bullish environment for silver prices it will be necessary for SLW management to be creative in the ways they grow the company and build shareholder wealth. If the past is any indicator, the team we have running SLW will do what it takes to move the company forward.
Regardless of how silver prices move, I believe there will be opportunities that SLW will take advantage of. And, with SLW's big brother Goldcorp backing the company up, I suspect that even rather large deals can be made to happen if the rewards for action are there.
There are very few, if any other companies with such a short history as SLW which have the street credibility and backing that Silver Wheaton enjoys. Compared to other money losing, cash flow leaking, high cash cost, "we can't get the ounces out of the ground profitably" silver companies, SLW will be a natural "go to" silver stock for investors that do an even minimal amount of due dilligence research.
Just as was the case with SLW's parent Wheaton River, the strengths of this company are obvious. This doesn't mean the ride will be smooth. It does make it very likely, however, that SLW will grind ever higher and outperform its peers. That's why I'm invested here.
Who dares, wins!
Omni, nice to see you back on board (message one, of course). I have had a question at the back of my mind for a while and would like to hear your opinion: do you think SLW should/will stick to its model of acquiring the silver by-product of other producers? I am not sure SLW ever stated that that was a model it had adopted and would stick to it.
But I like the idea, and I think others may be attracted to the company because of its present model. Does it make economic sense to stick to it? If ever SLW were to acquire a mine, it would then be a producer like others and lose its 'specialty'.
The recent investment in Bear Creek brought back those questions to the surface. I'd love to hear your take on this.
kosmoscitizen999 wrote, "is it normal for SLW to not trade in the last hour of the day?"
SLW is a brand new addition to the AMEX, so volume on that exchange is still thin. This will change over time. On the Toronto exchange, SLW has been around a bit longer (about 10 months) so trading is more robust. For example, there were more than 10 trades just in the last minute of trading in Toronto today. Here they are:
Time Price Shares $ Chng Buyer Seller
15:59 4.110 1,600 -0.090 Anonymous Maison
15:59 4.110 1,000 -0.090 TD Securities Maison
15:59 4.110 4,000 -0.090 Odlum Maison
15:59 4.130 600 -0.070 TD Securities Maison
15:59 4.130 400 -0.070 TD Securities GMP Securities
15:59 4.130 600 -0.070 Penson Maison
15:59 4.130 400 -0.070 Penson GMP Securities
15:59 4.120 94 OLT GMP Securities E*TRADE Sec.
15:59 4.120 300 -0.080 Anonymous E*TRADE Sec.
15:59 4.120 3,200 -0.080 CIBC E*TRADE Sec.
The bottom line is that for a stock that only began trading on a major exchange in October of last year, Silver Wheaton's liquidity is quite decent. While it's not enough to handle some bozo dumping 400K shares in 15 minutes, as happened earlier today, it is more than ample for any normal trading.
As far as its quality goes, what other pure play silver company is there with such strong earnings and cash flow? What other mining company carries no environmental risk? What other silver company would remain profitible even if silver went DOWN significantly? None. None except for SLW. Silver Wheaton is destined to be a leader among the silver stocks over the coming years. Believe it.
Who dares, wins!
well,i just bought a little more too,only to see some seller put a ton of supply up right after i bought.i must say,this selling makes no sense at all.from every way i see it,i can't understand not only selling,but such sloppy selling-looks like some rank amatuer with too much supply is just trashing the price.i wonder if someone is playing the naking shorting game?