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As Silver Outshines Gold, Which Silver Miners Are in Favor?

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Jul. 20 2016, Published 5:53 p.m. ET

Silver miners’ performance

Precious metal miners with substantial exposure to silver have also performed quite well year-to-date, as silver has outshined gold. Of these companies, Coeur Mining (CDE) has outperformed its peers. Coeur rose 332% in the first half of the year while First Majestic Silver (AG) followed closely with a 315% gain. Hecla Mining (HL), Pan American Silver (PAAS), and Tahoe Resources (TAHO) rose 170%, 143%, and 73%, respectively.

Coeur and First Majestic are highly leveraged operationally compared to their closest peers. They’re also relatively high-cost operators, leading to disproportionate gains. To brush up on Coeur, please read Can Coeur Mining Keep Soaring on the Back of Precious Metals?

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Silver miners’ ratings

The market consensus rating for Coeur Mining is “buy” with 45% of ratings. Out of a total of 11 analysts covering the company, 27% have “sell” recommendations and 27% have “hold” recommendations.

The average target price for CDE is $13 versus its current market price of $14, which implies a potential downside of 7%.

78% of analysts have given Hecla a “hold” recommendation while only 11% have a “buy” recommendation. At the start of 2016, Hecla had a “buy” rating from 30% of analysts.

37.5% of analysts rate First Majestic Silver (AG) a “hold” and 37.5% also rate it a “buy.” The stock has “sell” ratings from 25% of analysts. At the start of the year, the company didn’t have any “sell” ratings while the majority of its ratings were “hold” at 75%.

75% of analysts have “hold” ratings on Pan American Silver (PAAS), 17% have “buy” ratings, and only 8% have “sell” ratings. At the start of the year, 33% of analysts had given PAAS a “sell” rating.

Analysts’ favorite

Among all the primary silver producers (SIL), Tahoe seems to be an analyst favorite. It has the highest “buy” ratings at 87% and no “sell” ratings. Its current target price is $18, which implies an upside potential of 14%. Its consensus target price has seen an upward revision of 30% since the start of 2016.

For an in-depth review of silver miners’ ratings, see Which Silver Miners Do Analysts Favor as Silver Outshines Gold?

In the next part of this series, we’ll see how analysts’ recommendations for silver miners have changed recently.

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