In this article, we present to you the 12 best silver stocks to buy now. if you’re in a hurry, you can skip ahead and see the 5 best silver stocks to buy now.
In September, after a two-day meeting, all 17 Federal Reserve officials indicated that interest rates will stay zero through the end of 2021. 13 of the Fed officials also indicated that they see interest rates at zero through 2021. The Federal Reserve also promised to keep interest rates at zero until they see consistently higher inflation. This means they may not act to increase interest rates even if inflation goes above 2%. One result of this ultra-easy monetary policy is that the ten year Treasury bonds now yield only 0.8%. If you invest your money in these bonds for 10-years, you can make 8% and that’s before taxes and inflation eat away your paltry gains.
There is no end in sight to trillion-dollar Federal budget deficits and The Federal Reserve can’t print enough money to paper over out of control spending. State and local government revenues are projected to decline in the neighborhood of $150 billion in 2020. It is likely that they will be (at least partially) bailed out by the federal government which will add to the Federal deficit. All of this deficit spending may not lead to inflation in the short-term but what’s going to happen after we get out of the coronavirus recession and the economy starts to heat up again?
If investing in long-term bonds isn’t a good option for investors, how can investors protect and grow their hard earned savings? One option is dividend stocks. Investors who need current income go for high dividend stocks (see 10 best high dividend stocks to buy) whereas more conservative investors head to dividend growth stocks that are able to boost their dividend payments even during these tough times. Another option for investors is precious metals and speculative cryptocurrencies.
Silver is one of the oldest financial assets in the world. Silver is also used in a wide range of industrial processes. Along with gold, it is considered a safe-haven for investors against economic crises because they are resistant to inflation as they can’t be “printed” at will.
Even though we believe investing in blue-chip companies is a better alternative than investing in precious metals because they offer a lot of upside potential both in terms of earnings growth and inflation protection, investors can generate high returns by picking the right silver stocks and other precious metals miners. Cheap and profitable mining companies will not only deliver real returns, their market values will also appreciate as precious metal prices will go up during runaway inflation.
Billionaire Warren Buffett mocked gold investors for decades, yet he recently surprised his followers with this new position in a gold mining stock. Buffett’s Berkshire Hathaway had more than $500 million in this new position at the end of June. This isn’t a coincidence. Warren Buffett knows that you can create trillions of dollars out of thin air, but there will be a price to pay. Otherwise, we can print trillions of dollars every year, spend it, and don’t worry about a thing.
In a recent article, we talked about why it is a wise decision to buy silver stocks now that Biden is president.
“Silver offers a cheaper alternative to gold bullion, and it serves the same purpose. Most run to precious metals during economic uncertainty to protect from inflation or crashes. However, most people run to gold first because they believe it is a better hedge. Actually, silver bullion plays the same role, and it is more affordable for most.
To start, silver bullion actually tends to outperform gold in the market. Silver is a relatively small market, so although it has comparatively more volatility than gold, this also means silver will see major increases from even just a little money moving in the market. Consequently, a silver bull market tends to increase in value greater and faster than gold. Basically, the percentages for silver versus gold show more positive growth in favor of silver”
Year to date 2020, silver production was only down 4% compared to 2019 at 462,231 ounces despite the shutdowns during the Covid-19 pandemic. Revenue per tonne rose to $136.63 for the third quarter of 2020 and year to date it increased $111.12 in 2020.”
In order to identify the 12 best silver stocks to buy now, we started with the 42 holdings in Global X Silver Miners ETF (SIL) as of November 27, 2020, and we were able to narrow down our list to 12 stocks by using the hedge fund sentiment scores.
Our in-house research has shown that by using the hedge fund sentiment data, we can identify a small group of stocks that can outperform the S&P 500 index on an average by double digits annually. For example, our monthly newsletter’s portfolio of stock picks beat the market by more than 66 percent since March 2017 (see the details here). We have been publicly sharing some of our monthly newsletter’s stock picks as well. In October we shared this real estate stock idea and it is already up about 50%.
Based on our hedge fund sentiment data, we present to you the 12 best silver stocks to buy now. These are the most popular silver stocks among the 800+ hedge funds tracked by Insider Monkey:
12. Alexco Resource Corp. (NYSE:AXU)
No of HFs: 2
Total Value of HF Holdings: $671,000
Alexco is a Canadian silver company that owns the majority of the historic high-grade Keno Hill Silver District. Keno Hill has over 100 million ounces of silver.
The top hedge fund holder is Israel Englander’s Millennium Management with more than $491,000 invested in the stock at the end of September.
At the end of the third quarter ended September 30, 2020, Alexco reported an operating loss of $5.4 million, or $0.04 per share. The Company had $39.8 million in cash and cash equivalents, and a net working capital of $38 million.
11. Almaden Minerals (NYSE:AAU)
No of HFs: 3
Total Value of HF Holdings: $3.7 Million
Almaden Minerals develops gold-silver-copper properties. The company is engaged in the business of the acquisition of mineral properties.
At Q3’s end, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Eric Sprott is the biggest hedge fund holder of AAU. Sprott had $3.3 million invested in the stock at the end of September.
10. Gold Resource Corp. (NYSE:GORO)
No of HFs: 4
Total Value of HF Holdings: $1.7 Million
Gold Resource Corp is a gold and silver producer that targets projects featuring low operating costs. Their operations are located in Oaxaca, Mexico, and Nevada, USA.
The company recently declared its monthly instituted dividend of one-third of a cent per common share for November 2020 payable on December 23, 2020, to shareholders of records as of December 11, 2020.
In an article , we mentioned that Hedge Funds Never Been Less Bullish on Gold Resource Corporation,
“At third quarter’s end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -43% from the second quarter of 2020.
…When looking at the institutional investors followed by Insider Monkey, David Harding’s Winton Capital Management has the largest position in Gold Resource Corporation (NYSE:GORO), worth close to $0.7 million, comprising less than 0.1%% of its total 13F portfolio. The second largest stake is held by Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $0.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish contain Ken Griffin’s Citadel Investment Group, Cliff Asness’s AQR Capital Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to Gold Resource Corporation (NYSE:GORO), around 0.02% of its 13F portfolio. Arrowstreet Capital is also relatively very bullish on the stock, setting aside 0.0009 percent of its 13F equity portfolio to GORO.”
9. Great Panther Mining LTD (NYSE:GPL)
No of HFs: 5
Total Value of HF Holdings: $5 Million
Great Panther Mining is a primary silver mining and metal producer. They explore gold, silver, copper, lead, and zinc ores.
The company has recently reported a temporary suspension on operations at the Topia silver-gold-lead-zinc mine in Mexico brought about by Covid-19 cases among their workforce. However, Great Panther said in a press release that the suspension is not expected to impact the company’s ability to achieve its production guidance.
During the third quarter of 2020, the company reported a revenue of $77 million, representing an 8% increase over the same period of 2019. Billionaire Jim Simons’ quant hedge fund has the largest position in GPL among the 800+ hedge funds tracked by Insider Monkey.
8. Endeavour Silver Corp (NYSE:EXK)
No of HFs: 7
Total Value of HF Holdings: $11.9 Million
Endeavour Silver Corp is a mid-tier precious metals mining company that operates three high grade, underground, silver-gold mines in Mexico. By acquiring two adjacent groups of mineral concessions, La Sanguijuela and Cerro Gordo, covering multiple mineralized vein formations, the company extended the footprint of its Terronera Project located in Jalisco State, Mexico, to 20,128 hectares.
The top hedge fund holder is also Jim Simon’s Renaissance Technologies with $4 million invested in the stock at the end of September.
During the second quarter of 2020, EXK generated a net revenue totaling $20.2 million.
7. Compania de Minas Buenaventura SAA (NYSE:BVN)
No of HFs: 8
Total Value of HF Holdings: $91 Million
Buenaventura is a precious metal company engaged in the exploration, mining, and processing of gold, silver, and other metals in Peru.
The top hedge fund holder is Richard Oldfield’s Oldfield Partners which had $56 million invested in the stock at the end of September.
During the second quarter, the company’s 2020 EBITDA from direct operations was $26.5 million, compared to $47.1 million reported in 2019.
6. McEwen Mining Inc (NYSE:MUX)
No of HFs: 10
Total Value of HF Holdings: $5.3 Million
McEwen Mining Inc is a diversified gold and silver producer and explorer with operating mines located in Nevada, Canada, Mexico, and Argentina. The company also owns a large copper deposit in Argentina.
On November 20, 2020, the company reported a temporary lockdown on their 49%-owned San Jose mine in Argentina due to the significant cases of Covid-19 infections, the mine is expected to resume with limited operations in the coming days.
The top hedge fund holder is Israel Englander’s Millennium Management which had $1 million invested in the stock at the end of September. Millennium Management is also the top hedge fund holder for AXU.
As the second quarter of 2020 ended, the company reported cash and working capital of $18.4 million and $25.5 million.
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Disclosure: None. 12 Best Silver Stocks To Buy Now is originally published at Insider Monkey.
