Friday, November 12, 2010

Pink Silvers

The four Silver companies I like, share the folowing characteristics;

  • Mines are located in politically stable and mining friendly countries (Peru and Mexico)
  • Large and growing proven reserves and long lived mines
  • Reasonable to excellent extractation cost profiles
  • Low relative Market caps to Major producer peers
The four I like and own are:

  • Bear Creek(BCEKF)
    • Advanced exploration company with low market cap to oz of silver
    • Huge reserves
    • Long lived mines
    • High annual Production potential
    • Low Market Cap compared to major producer market cap
  • Genco Resources (GGCRF)
    • Junior Producer
    • Huge reserve potental
    • Low Market Cap to to oz of silver
    • Extremely undervalued to producing peers
  • Great Panther(GPRLF)
    • Junior Producer
    • Recent record Revenue and Earnings
    • Expected to double annual production
    • Potential to exponentially grow reserves
  • First Majestic (FRMSF)
    • Intermediate Producer
    • Low market cap per oz. of silver
    • Low market cap to major producer peers
All of these companies are fairly valued as they sit today, but with production growing, reserves growing, market cap underweighted against their peers, and average prices for silver growing, these companies are nicely postioned.  The sweetener for me is their value discount to major producers makes them attractive acquisition targets, and if the dollar buckles further, relative value for me increases.

I hold a relatively low dollar value in all of these ($20K), as they are speculative,so apply your risk management.  Either scale in or wait for a RSI pullback and then enter.

1 comment:

  1. Nice picks-Any tips for trading the pinks? I know the bid/ask/volume is nuts and you can get shafted on market orders so limit orders are the best option. I know unloading them in high volume days is recommended and you have to be very patient with these guys. Mine will be a long term hold-may unload a % in 2001. I like all yours, but may skip Bear Creek and go with Revett, ECU, Silver Dragon and US Silver.