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Analyzing Analysts’ Love-Hate Relationship with Silver Stocks

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Silver versus gold

YTD (year-to-date), silver has slightly underperformed gold. As of June 26, the SPDR Gold Shares ETF (GLD), which tracks gold prices, has fallen 3%. During that same period, the iShares Silver Trust ETF (SLV), which tracks silver prices, has fallen 3.9%.

Because silver typically acts as a leveraged play on gold prices, it usually follows gold but with greater intensity. That, however, hasn’t been the case so far in 2018.

Silver miners’ performances

The individual stock performances of silver miners have varied greatly YTD. While their overall performances haven’t been remarkable, the five silver miners we’ll be discussing in this series, have broadly outperformed silver prices and the silver miners’ index (SIL).

Pan American Silver (PAAS) has outperformed its close peers, rising 12.7% YTD. Hecla Mining (HL), on the other hand, has had the worst performance, falling 6.8%. First Majestic Silver (AG), Tahoe Resources (TAHO), and Coeur Mining (CDE) have returned 10.8%, 3.5%, and 2.3%, respectively.

The huge divergences between silver prices and silver miners’ performances have likely been the result of company-specific factors and the leveraged natures of these companies. We’ll discuss these factors in detail later in this series.

Series overview

Analysts’ recommendations and ratings act as measures to gauge market sentiments. They reflect the overall level of bullishness or bearishness on a particular company or industry.

In this series, we’ll look at the recommendations and ratings for the above-mentioned silver miners. We’ll see which stocks analysts like and don’t like based on their percentage ratings and changes. We’ll look at their stock performances and the reasons for their divergences, as well as analysts’ estimates for their revenues and EBITDA.

Let’s start by looking at ratings for First Majestic Silver, which has the most “buy” ratings from analysts.

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