Silver versus gold
In 2018 so far, silver prices have significantly underperformed gold prices. As of September 13, while the SPDR Gold Shares ETF (GLD), which tracks gold prices, has fallen by 8.0%, the iShares Silver Trust ETF (SLV), which tracks silver prices, has fallen more than double that at 16.5%.
Because silver typically acts as a leveraged play on gold prices, it usually follows gold but with greater intensity.
Silver miners’ performances
The individual stock performances of silver miners have varied greatly YTD. While their overall performances haven’t been remarkable, some of 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, losing just 5.2% YTD. Tahoe Resources (TAHO), on the other hand, has had the worst performance, falling 42.6%. First Majestic Silver (AG), Hecla Mining (HL), and Coeur Mining (CDE) have returned -17.8%, -28.2%, and -26.0%, respectively.
The huge divergences between silver prices and silver miners’ performances have likely been the result of company-specific factors and the leveraged nature of these companies. We’ll discuss these factors in detail later in this series.
Analysts’ recommendations and ratings act as measures to gauge market sentiment. 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 these silver miners. We’ll see which stocks analysts like and don’t like based on their ratings and changes. We’ll also 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.