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The Best Silver Stocks to Buy Now

By Matt Badiali, editor, S&A Resource Report
Wednesday, January 29, 2014

If you've been reading Growth Stock Wire for the past few weeks, you know that we think silver is likely to rally this year.
 
Owning a silver exchange-traded fund can be a terrific way to profit. But what if you want a little more "juice" from this rally?
 
I'll cover several of the best stocks to own in today's essay. But first, let's look at the "big picture" for silver...
 
Last June, silver hit its lowest level since 2010 when it bottomed at $18.49 per ounce. The price quickly recovered – and has not returned to the sub-$19 level since. Today, silver is trading near $20 per ounce and showing signs it wants to continue upward. You can see this in the chart below...
 
silver price per ounce
 
If silver has bottomed, it makes sense to consider large, safe silver producers who will benefit from an uptick in the price of silver. Fortunately, the list of quality miners that focus mostly on silver is fairly short.
 
These companies stand to benefit the most from surging prices. As the price rises, it will increase their revenues (and profits) from every ounce of silver they mine. These producers will become more valuable with every dollar the price goes up.
 
Producer
Stock Price
P&P Silver
Reserves*
Production*
Yield
Silver Wheaton (SLW)
$21.92
891.6
26.5
1.7%
Pan American Silver (PAAS)
$12.57
318.9
22.1
4.1%
Coeur Mining (CDE)
$10.60
95.9
19.5
0.0%
First Majestic Silver (AG)
$10.48
90.8
10.2
0.0%
Silver Standard Resources (SSRI)
$7.87
566.0
8.6
0.0%
Hecla Mining (HL)
$3.09
94.6
8.2
0.4%
Source: Capital IQ and Bloomberg
* In millions of ounces

Some of these producers pay a solid dividend. So investors in these companies can earn income while we wait for silver to move higher.
 
The first company on our list, Silver Wheaton, isn't actually a miner. It holds "streams" of silver. These streams are rights to silver production the company bought years ago from mines and pays a minimal price for today. Silver Wheaton has rights to almost 900 million ounces of proven and probable silver reserves, so it will profit from silver production for a long time.
 
While it is sensitive to low silver prices, its profits will soar quickly as the price increases. And its dividend is equal to 20% of its cash flow. When the silver price goes up, so will its cash flow... and its dividend.
 
Silver has already started to move higher. Consider buying one of these silver producers before they get too expensive.
 
Good investing,
 
Matt Badiali




Further Reading:

"Silver looks too good to ignore," Jeff Clark writes. He says the last time we had a setup like this, "silver popped 19% higher in just a few weeks." Get all the details here: How to Profit on a Silver Breakout.
 
Matt says commodity and auto imports are at all-time highs in China. And the country's air-pollution problem is about to spark a rally in two other precious metals... Learn more here: How to Profit from China's Record Auto Sales.

In The Daily Crux
Market Notes
Gold-miner fund GDX jumps 12% in the past month.
 
Big Russian stock fund RSX touches a five-month low.
 
"Inflation hedge" Hershey is sitting just 2% below a new all-time high... shares are up 198% in four years, including dividends.
 
Uranium stocks are working on a new uptrend... uranium-miner fund URA is up 17% since "bottoming" three months ago.
Market Watch
Symbol Price
Change
52-Wk
S&P 500 1792.50 +0.6% +19.5%
Oil (USO) 34.69 +1.3% -0.7%
Gold (GLD) 120.95 +0.0% -24.5%
Silver (SLV) 18.85 -0.2% -36.9%
U.S. Dollar 80.57 +0.1% +1.0%
Euro 1.37 +0.2% +1.8%
Volatility (^VIX) 15.80 -9.3% +16.4%
Gold Stocks (^HUI) 216.78 +1.8% -45.2%
10-Year Yield 2.75 -0.7% +39.6%

World ETFs
Symbol Price
Change
52-Wk
Israel (ISL) 16.35 -0.9% +21.9%
USA (SPY) 179.07 +0.6% +21.7%
Japan (EWJ) 11.63 +0.9% +21.1%
Taiwan (EWT) 13.72 +0.7% +6.0%
S. Korea (EWY) 58.72 +1.0% +0.8%
Canada (EWC) 27.90 +0.6% -2.5%
Singapore (EWS) 12.48 +1.9% -6.8%
Russia (TRF) 14.19 -1.2% -7.4%
S. Africa (EZA) 58.60 +2.3% -8.0%
India (IFN) 19.13 +0.8% -8.6%
China (FXI) 34.55 +1.1% -13.0%
Lat.America (ILF) 33.50 +0.3% -23.5%

Sector ETFs
Symbol Price
Change
52-Wk
Biotech (PBE) 41.24 +2.4% +66.4%
Alt. Energy (PBW) 6.57 +2.3% +53.0%
Defense (PPA) 30.99 +0.5% +44.6%
Media (PBS) 24.99 +1.1% +42.6%
Health Care (IYH) 118.17 +1.3% +33.8%
Big Tech (QQQQ) 85.85 -0.1% +29.4%
Consumer Svcs (IYC) 117.05 +0.8% +27.2%
Industrials (IYJ) 97.60 +0.9% +26.3%
Transportation (IYT) 130.32 +1.2% +26.0%
Software (PSJ) 35.84 +0.3% +24.7%
Financials (IYF) 78.20 +1.3% +22.9%
Retail (PMR) 31.77 +0.1% +22.0%
Nanotech (PXN) 7.78 +1.7% +21.6%
Telecom (IYZ) 29.08 +0.3% +20.7%
Semis (PSI) 18.31 0.0% +20.1%
Insurance (PIC) 19.01 +0.1% +18.3%
Water (PHO) 25.57 +1.8% +16.1%
Construction (PKB) 21.98 +1.2% +16.1%
Basic Mat (IYM) 77.25 +0.5% +9.7%
Utilities (XLU) 38.21 +0.4% +9.7%
Real Estate (IYR) 64.57 +1.0% -1.8%

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