Performances of silver miners
Precious metal miners with substantial exposure to silver have performed quite well in 2016. Silver miners are essentially a leveraged play on silver, and silver outperformed gold in 2016. While silver prices rose 17.0% in 2016, gold prices rose 8.5%. Silver companies have returned far more, depending on their leverages.
Of these companies, Coeur Mining (CDE) has outperformed its peers, rising an impressive 268.0%. Hecla Mining (HL) has risen 177.0%. First Majestic Silver (AG), Pan American Silver (PAAS), and Tahoe Resources (TAHO) have risen 123.0%, 123.0%, and 6.6%, respectively.
Coeur and Hecla are highly leveraged operationally compared to their closest peers. They’re also high-cost operators, leading to disproportionate gains. To brush up on Coeur, be sure to read Can Coeur Mining Continue to Outperform Peers in 2017?
Ratings for silver miners
The market consensus rating for Coeur Mining (CDE) is a “buy” from 60.0% of analysts. Of the ten analysts covering the company, 40.0% have given Coeur Mining a “hold” recommendation. There are no “sell” recommendations for the stock.
The average target price for CDE is $12.80 compared to its current market price of $11.65, which implies a potential downside of 10.0%.
About 60.0% of analysts have given Hecla Mining a “hold” recommendation, and 20.0% have given it a “buy.” At the start of 2016, Hecla had a “buy” rating from 30.0% of analysts.
For First Majestic Silver (AG), analyst ratings are split between “hold” and “buy,” with 50.0% recommending each. At the start of the year, the company didn’t have any “sell” ratings, and 75.0% of its ratings were “hold.”
About 36.0% of analysts have “hold” ratings on Pan American Silver (PAAS), while 64.0% have “buy” ratings, and there are no “sell” ratings. At the start of 2016, only 17.0% of analysts had given PAAS a “buy” rating.
Among all the primary silver producers (SIL), Tahoe Resources (TAHO) seems to be the most-liked silver miner. It has 87.0% “buy” ratings and 13.0% “hold” ratings. Its current target price is $19, which implies an upside potential of 60.0%. Its consensus target price has seen an upward revision of 17.0% in the last year.
For an in-depth review of silver miners’ ratings, see Silver Miners in 2017: Which Offer the Most Value?
In the next part of this series, we’ll see how analysts’ recommendations for silver miners have changed recently.