Sean Brodrick – Opportunities Presenting Resource Investors In Silver And The Quality Silver Stocks
Sean Brodrick, Editor of Wealth Megatrends and contributing analyst to Weiss Ratings Daily, joins us to outline opportunities that he is seeing in silver and the quality silver stocks. We start off discussing the disconnect we’ve seen the last couple of years in silver versus gold, but that recently this year, and even in the month of August so far, we’ve started to see that outperformance of silver over gold. Sean points to the industrial side of solar panel production underpinning the current pricing, but ultimately sees investor demand starting to come in to both silver and the silver equities as the force that could really create some outsized moves to the upside in the medium-term.
When looking at the universe of silver equities, Sean is less attracted to the earlier-stage junior explorers, preferring the revenue generating silver producers as having the best leverage to rising prices without getting stuck in value stunting equity dilution. We discuss the potential for the silver producers just below or near parity to have the most upside torque when higher silver prices lead to significant margin expansion and improving economics. Sean brings up Hecla Mining (NYSE: HL) as an example where they’ll see their margins improving in Q2 and Q3 and that they have the Keno Hill mine that they acquired from Alexco as another area of growth in the latter half of this year. This leads into a discussion on if we’ll see more merger and acquisitions start up in the silver space.
We wrap up discussing how diversification in jurisdiction plays a factor in his portfolio and recommendations to subscribers. He is in a wait and see mode currently with regards to Mexico, due to the political posturing, but that makes him more open to other areas in Canada, the US (specifically in Nevada), Argentina, Australia, and even Africa. He highlights Aya Gold & Silver (TSX: AYA, OTCQX: AYASF) as having had great performance for his subscribers for some time, while most North American investors may not have expected that out of a company based in Morocco.
- In full disclosure, Shad is a shareholder of Hecla Mining at the time of this recording.
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Click here to follow along with Sean’s work at Weiss Ratings Daily and Wealth Megatrends
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IPT essentially remains an “at the money” call option so those who aren’t bullish silver have little reason to own it. It wasn’t many years ago that $30 silver would put IPT deep in the money but those days are gone forever barring a bonanza grade discovery.
Since I am quite bullish silver (and even zinc) I have no problem with my position.
https://stockcharts.com/h-sc/ui?s=IPT.V&p=W&yr=4&mn=6&dy=0&id=p41906560207&a=1473701106
This is one of the reasons why I like The Canadian Securities Exchange, versus the TSX-V or the TSX, if you trade without a broker, and have a self-directed TFSA account the CSE gives the investor depth display By Order and By Price. Here is what it looks like for Cartier Silver, just simply scroll down and you can see these orders. DT
IPT had a news release yesterday and at the end of the day this stock was down. I wouldn’t feel badly if I owed IPT because that is the state of these markets today. You almost don’t want to see a news release anymore because you get “SELL THE NEWS”. This hasn’t been discussed much here but it is rampant with most stocks getting negatively hit after a news release. These are troubling times also I have seen several instances where companies haven’t been reporting their findings because they may fear their stock being sold off. Either way the investor loses. DT