First Majestic Silver Corporation

Silver has been falling over the past few years, despite surging demand for its industrial use. Fundamentally, silver seems to be strong due to rising demand and a year-over-year shortfall in its supply.

Silver companies try to maintain an optimal level of debt-to-equity to lower their costs of capital and maintain an optimum level of risk-reward for shareholders.

First Majestic, New Gold, Agnico, and Silver Wheaton now have RSI scores of 60.5, 56.2, 57.6, 59.6, respectively.

The performances of precious metal miners with substantial exposure to silver have been disappointing in 2017. As a group, they’ve returned just 0.9% YTD.

CDE stock has risen 2.6% year-to-date. However, during the same period, silver prices gained 4.7% and the Global X Silver Miners ETF (SIL) rose 5.5%.

Precious metals miners with substantial exposure to silver are usually classified as silver miners.

Mining companies like First Majestic Silver (AG), Silver Wheaton (SLW), Pan American Silver (PASS), Coeur Mining (CDE), and Hecla Mining (HL) are primarily into silver exploration.

For investors considering silver stocks due to their leveraged exposure to silver prices, the higher the company’s revenues derived from silver, the better.

During the past week, average hourly earnings, excluding the farming industry, were below analysts’ expectation of 0.10%.

Gold ended the day almost flat on Wednesday, May 2, and closed at $1,304.90 per ounce.

Precious metals prices shot up on January 19, 2018, with concerns looming over the shutdown the of the US government.

First Majestic Silver saw correlation drop during the past three years. On a three-year basis, its correlation with gold was 0.57.

The target prices of the four miners we’re covering in this part are higher than their current trading prices, which could lead to an optimistic outlook on their prices.

When analyzing platinum markets, it’s important to compare the metal’s performance with that of gold, which is the most crucial of the precious metals.

The rise in inflation could be a positive sign for the current scenario.

Coeur Mining and Hecla Mining have seen a loss in their prices on a year-to-date basis, falling 17.9% and 24.0%, respectively.

All four precious metals except palladium witnessed an up day on December 18, 2017. Platinum touched the day’s high of $915.3 and ended up at $913.2 per ounce.

The Global X Silver Miners ETF (SIL) and the Sprott Gold Miners (SGDM) have fallen 3.5% and 4.4%, respectively, on a 30-day trailing basis.

If we look at the YTD correlations of the select mining shares to gold, there has been a reasonable fall. On a YTD basis, Sibanye Gold has the least correlation to gold.

Coeur Mining (CDE) was one of the stocks to gain significantly in 2016, rising ~270%. The situation in 2017 has reversed completely.

As of November 16, 2017, Alamos Gold, First Majestic Silver, Sibanye Gold, and AngloGold Ashanti had call-implied volatilities of 46.9%, 54.6%, 63%, and 40.9%, respectively.

Precious metal miners saw mixed performance on Tuesday, November 14. Gold and silver saw an up-day while platinum and palladium were low.

If we look beyond the dollar influence on precious metals, we can analyze how the probability of an interest rate hike could influence precious metals and their miners.

AG, CDE, and HL have shown YTD losses of 12%,16%, and 9.2%, respectively. The silver-based Global X Silver Miners Fund (SIL) has a YTD loss of 0.31%.

Franco-Nevada and Silver Wheaton have seen an upward trend in their correlations with gold.

The gold-platinum spread was ~1.38 on October 23. The RSI (relative strength index) level for the gold-platinum spread is now at 93.9.

On October 23, Alamos, First Majestic Silver, Sibanye Gold, and Gold Fields had call implied volatilities of 46.9%, 54.6%, 63%, and 40.4%, respectively.

Understanding mining stocks’ correlation with gold is crucial for investors in precious metal mining stocks.

Ongoing worries in North Korea and political chaos in Washington have been crucial in boosting the prices of precious metals.

Most precious metals had a down day on Tuesday, October 10, despite the recent overall upward movement in precious metals.

After the Guatemalan government’s decision to suspend Tahoe Resources’ (TAHO) license, the company saw several downgrades.

On September 29, Alamos, First Majestic Silver, Franco-Nevada, and Pan American had call implied volatilities of 46.9%, 54.6%, 25.5%, and 34%, respectively.

Many mining stocks saw a revival in prices on Monday, September 25, 2017, since precious metals saw an upswing.

On September 22, 2017, First Majestic Silver, Goldcorp, Newmont Mining, and Silver Wheaton had volatilities of 49.1%, 26.7%, 23.5%, and 30.8%, respectively.

Precious metal mining stocks follow trends in precious metals, and they’re a very volatile segment of the equity markets.

Precious metals have been buoyed by tension in North Korea. If North Korea does another missile test, it could prompt investors to move to haven assets such as gold, silver, Treasuries, and major currencies.

Miners’ correlation with gold In this part, we’ll look at mining stocks’ correlation with precious metals by comparing their price movement. Specifically, we’ll analyze Alamos Gold (AGI), First Majestic Silver (AG), B2Gold (BTG), and Royal Gold (RGLD). The mining stocks have recovered in the past few weeks. The Direxion Daily Gold Miners Bull 3x Shares […]

July 20, 2017, was an up day for the euro, which put downward pressure on the US dollar as represented by the U.S. Dollar Index (or DXY).

Gold and silver-based funds such as SGOL and SIVR are impacted by changes in precious metal prices. They fell due to the fall in precious metals on Friday.

Gold tumbled to an eight-week low on July 3, 2017. Gold futures for August delivery fell almost 1.9% to settle at $1,219.2 per ounce.

Silver has seen a five-day trailing loss of 2.6%, while gold and platinum fell 1.7% and 1.9%, respectively.

Although gold and silver had a down day on Friday, June 9, 2017, platinum and palladium rose about 0.23% and 1.2%, respectively.

The rise in gold on June 6 also boosted the other three precious metals. Silver futures for August delivery were 1.4% higher for the day and closed at $17.6 per ounce.

Over the past year, silver has been very volatile compared to the other three precious metals. Silver was the highest among precious metals in mid-April 2017.

Metal investors have to study upward and downward trends as price change predictability can be affected by rises and falls in precious metal prices.

Mining stocks and precious metals As global tumult grips markets and investors are turning to mining stocks as safe havens, it’s crucial to understand which stocks are closely tied to precious metals. Stocks with a higher correlation with precious metals will likely be impacted more by global indicators that influence precious metals. The Direxion Daily […]

Since the French elections are right around the corner, investors might start parking their money in safe-haven assets like gold.

Commodity exposure In the previous part of this series, we looked at miners’ geographic exposure, which is important to consider due to the geopolitical risks some jurisdictions face. It’s equally important to consider their revenue compositions in terms of commodity exposure. ­ Contribution from silver Silver companies are rarely pure-play miners. For investors considering silver […]

Mining funds such as the iShares MSCI Global Gold Min (RING) and the leveraged ProShares Ultra Gold (AGQ) have also seen significant correlations with their respective precious metals.

Coeur Mining (CDE) ended 2016 with an outstanding debt of $210.9 million. That’s 57.0% less than at the end of 2015.