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Why Silver Miners’ Stock Performance Has Diverged in 2017

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Silver versus gold

As of July 21, 2017, silver had underperformed gold year-to-date (or YTD). While the SPDR Gold Shares ETF (GLD), which tracks gold prices, had gained 7.2% YTD, the iShares Silver Trust ETF (SLV), which tracks silver prices, had gained 3.2%.

While silver is usually a leveraged play on gold, advancing with a greater intensity in the direction of gold prices, 2017 has been different. Unlike gold, silver has industrial uses as well. Its industrial attributes may be affecting prices more than precious metal attributes, leading to its underperformance of gold.

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Silver miners’ performance

Silver miners’ YTD performance hasn’t been remarkable either. That said, individual silver miners’ performance has diverged significantly. Tahoe Resources (TAHO) underperformed peers by a huge margin. Its stock has fallen 40% YTD. Hecla Mining (HL), First Majestic Silver (AG), and Pan American Silver (PAAS) have risen 2.7%,4.8%, and 12.0%, respectively. Coeur Mining (CDE) also had a negative performance. This divergence between silver prices and silver miners’ stock prices continued due to company-specific factors and the leveraged nature of these companies. We’ll discuss these factors later in this series. For a detailed discussion on silver miners’ performance, read Which Silver Miners Look Attractive after 1Q17 Results?

Series overview

It’s important for investors to keep tabs on analysts’ recommendations and ratings, as they are market sentiment indicators. These ratings reflect how bullish or bearish analysts are on a particular company or industry.

In this series, we’ll look at recommendations and ratings for silver miners. While analysts’ estimates usually lag behind price movements, they are still important factors to consider when gauging consensus sentiment. Let’s start by looking at ratings and expectations for Coeur Mining (CDE).

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