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Silver Wheaton Corp. Message Board

  • investora2z investora2z Apr 21, 2013 11:52 AM Flag

    At crucial support levels

    With the prices of precious metals on a decline, the stock prices of gold / silver companies have followed suit. SLW has fallen 20% on a 52 week basis. The real downtrend started in November when it made its 52 week high ($41.30). It is almost half that value now. In fact, it is trying hard to find support at current levels of around $22. This appears to be a crucial support, and if this gives way, then the cut could be much deeper. The 10 day volume average is 9.3 million which is double the 3 month average of 4.6 million. So the momentum seems to be building up on the downside. The fundamentals have been good with the last quarter showing good growth in revenue (78%) and net income (50%) . Even for the full year 2012, the revenues increased by 16% to $850 million and the net income increased by 6.5% to $586 million. The squeeze in margins was evident. Despite the fall, the stock has been a multibagger for the investors who have held it since the $3 levels in November 2008. The peak price of $47 was achieved in 2011. The good part is that several mining companies, especially those in development stage are available at very cheap valuations. Shortly, Pershing Gold (PGLC) is also about to start production (in 2014), and it is expected that the stock will take off soon. PGLC is expected to produce 50K ounces of gold in the first year of production. In anticipation of the rise, Coeur D' Alene (CDE) had recently taken a stake in PGLC. SLW can also be on the lookout for acquisition of assets / contracts which may currently be available at low prices. The business model of SLW is basically built on such low priced acquisitions during depressed market sentiments. The stock, however, has to hold on to $22 so that it can attempt a rebound.

26.56Aug 26 4:00 PMEDT