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Silver Wheaton Corp. Message Board

  • investora2z investora2z Jul 10, 2013 7:22 AM Flag

    More good days are required

    The sharp correction in June has stopped, at least temporarily. Many more such good days are required. Most stocks have bounced sharply from the lows and Silver Wheaton is also up by around 10% from the low of $17.76 made a couple of weeks ago. The prices of precious metals are also off the lows by around 5%. The recent lows will be crucial support points in the short term. They surely need to hold when tested. Silver Wheaton has also corrected sharply during the crash, but the fundamentals are likely to be less impacted by the overall scenario due to its low risk business model. However, the affect is definitely there, and stock is likely to move in tandem with the other stocks in the sector. In case of any sustained rebound in the sector, companies like SLW are likely to rebound much more strongly than others. Even the analysts are less bearish on Silver Wheaton as compared with the mining stocks. To improve the sentiments, the gold prices have to show strength and move towards crucial levels on the upside. Stocks need to rise by around 10% from current levels to improve the sentiments. The low prices have made many companies in the sector attractively valued, and as soon as the sentiments improve, investors will start picking stocks based on fundamentals of individual companies. Most companies are trading below book value, and development stage companies like Pershing Gold (PGLC) are trading at a significant discount to potential. Marc Faber had stated that if gold prices rebound, selected stocks would rebound much more strongly. Silver Wheaton could be one such stock. Jim Rogers had stated that he would start buying when prices touched $1300 and buy more if they drop to $1200. The current prices are below mining costs and hence there may be some adjustments due to that. However, the prices need to stabilize soon to avoid cascading negative effects.

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