Although the precious metals market plummeted this month, the victim of a recent surge in U.S. bond yields amid fears around the potential for a spike in inflation, the outlook for silver remains very encouraging given an improving macroeconomic backdrop and higher industrial demand.
Last month, silver hit its highest level since February 2013, spurred by day-trader activity following the GameStop (GME) short squeeze. While the price of silver has since declined, analysts believe the precious metal could climb again in the coming months.
With the increasing penetration of 5G networks and other advanced technology in the consumer electronics industry, coupled with more installations of new photovoltaic capacity and the increasing electrification of vehicles, silver which has applications in all these industries, is expected to resume its rally soon on soaring demand from these sectors. Investors’ optimism about the sector is evident in iShares Silver Trust ETF’s (SLV) 105.6% gains over the past year. SLV has declined 3.9% over the past month.
Silvercorp Metals Inc. (SVM)
Based in Vancouver, Canada, SVM acquires, explores, develops, and mines mineral properties in China. It mainly explores for silver, gold, lead, and zinc and holds an interest in the Ying silver-lead-zinc project and GC silver-lead-zinc mine in China.
Last month, the company received a Tieluping-Longmen Mining License renewal and extension for the TLP, LME and LMW mines in the Ying Mining District. This license renewal demonstrates the company’s strong performance over the past years and its commitment to operating to the highest safety, health, and environmental protection standards.
Also last month, SVM’s subsidiary, New Infini Silver Inc., acquired a 100% interest in the La Yesca Silver Project located in Nayarit State, Mexico. The acquisition should allow the company to pursue independent growth and capital allocation strategies. SVM’s revenue has increased 20% year-over-year to $53.3 million for its fiscal third quarter ended December 31. This is attributable to an $10.5 gain from an increase in the net realized selling prices for silver, gold, lead and zinc. Its net income rose 33% from its $8.4 million year-ago value, while its EPS grew 25% year-over-year to $0.05. The company’s income from mine operations increased 57.3% from the prior-year quarter to $24.8 million.
A consensus EPS estimate of $0.28 for the current quarter, ending March 30, 2021, represents a 53% improvement from its year-ago value. The consensus revenue estimate of $198.87 million for the current quarter represents 25.2% growth from the same period last year. The stock has gained 84% over the past year but has lost 20.8% year-to-date.
SVM’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
SVM has a B Grade for Growth, Quality, and Momentum. Of 14 stocks in the Miners – Silver group, it is ranked #2.
To see additional POWR Ratings for Sentiment, Stability, and Value for SVM, Click here.
Great Panther Mining Limited (GPL)
Formerly known as Great Panther Silver Limited, GPL is a precious metals mining and exploration company that operates three mines in Brazil and two mines in Mexico. The company’s exploration properties include the El HorcÃn, Santa Rosa, and Plomo projects in Mexico, and the Argosy project in Canada.
Last December, the company re-started its operations at Topia following a temporary suspension to limit the spread of COVID-19. This should allow GPL to achieve greater production and generate higher revenues in the near term.
GPL’s revenue has increased 4.6% year-over-year to $68.71 million in the fourth quarter ended December 31. The company’s mine-operating earnings before non-cash items rose 284% versus its year-ago value to $32.43 million, while its free cash flow increased 277% year-over-year to $9.06 million. Its cash flow from operating activities grew 131% from its the year-ago value to $17.97 million over this period.
A consensus EPS estimate of $0.16 for 2021 represents a 205.6% increase year-over-year. Moreover, GPL beat the Street’s EPS estimates in three of the trailing four quarters, which is impressive. The $292.87 million consensus revenue estimate for the current year represents a 12.3% increase from the same period last year. The stock has gained 124.1% over the past year but has lost 3.6% year-to-date.
GPL’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating which equates to Buy in our POWR Ratings system. GPL has a B grade for Momentum, Value, and Sentiment. Among the 14 stocks in the same group, it is ranked #1.
Click here to see the additional POWR Ratings for GPL (Growth, Quality, and Stability).
The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
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SVM shares were trading at $5.34 per share on Thursday afternoon, down $0.13 (-2.38%). Year-to-date, SVM has declined -20.18%, versus a 5.04% rise in the benchmark S&P 500 index during the same period.
About the Author: Imon Ghosh
Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization. More...
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