We recently published a list of 10 Best Silver Mining Stocks to Buy Right Now. In this article, we are going to take a look at where Coeur Mining, Inc. (NYSE:CDE) stands against other best silver mining stocks to buy right now.
Silver’s price saw significant appreciation in 2024, with the precious metal up by over 25% on a YTD basis. Market experts believe that the price appreciation stemmed from its expected high industrial demand, primarily from EV manufacturers. Furthermore, they believe that volatility in the dollar index and heightened geopolitical tensions hinted at a robust appetite for precious metals. Silver has now found its applicability in solar panels for renewable energy, in advanced healthcare, in electronics, and several other technologies. This wide adoption provided support to the precious metal in 2024.
Silver Institute mentioned that silver demand for solar power more than doubled over the previous five years, increasing from 74.9 million ounces in 2019 to an expected 232 million ounces by this year’s end.
Where Is Silver Headed?
Geopolitical concerns, including wars in Ukraine and the Middle East, together with China’s latest measures to fuel its economic recovery, supported much of the silver price rally in the recent past. As per industry experts, expectations of strong demand from the renewable energy sector and electronics should be able to offset the uncertainties surrounding economic and monetary policies in the near future.
Apart from its use as an investment, the precious metal has applications in industrial and medical industries, unlike gold. As per Techopedia, only 10% of gold output is used in industrial use, while more than 50% of silver production is used in industrial applications. As per Silver Institute, record industrial demand and recovery in jewelry and silverware are expected to lift demand to 121 billion ounces in 2024, while mine supply is expected to increase by just 1%. Notably, the exchange-traded products remain on track for their first annual inflows in 3 years. This is because silver’s investment appeal has increased off the back of rate-cut expectations, periods of dollar weakness, and falling yields.
The Silver Institute also highlighted that industrial demand should increase by 7% in 2024 to outpace 700Moz for the first time on record.
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Expectations of Increased Silver Production
The Silver Institute highlighted that, in 2024, global mined silver production is expected to rise by 1% YoY to 837Moz. This is expected to be supported by growth from Mexico, Chile, and the US, which should outpace lower output from Peru, Argentina, and China. The production from Mexico is expected to rise by 10Moz, which equates to 5% YoY, to 209Moz. This should stem from increased mill throughput and grade at Pan American Silver’s La Colorada operation, following the upgraded ventilation infrastructure. Also, the output is expected to be fueled by a recovery in production from Newmont’s Peñasquito mine.
In the release dated 12th November, The Silver Institute also mentioned that recycling in 2024 is projected to grow 5% to a 12-year high. This rise should come from price-sensitive sectors, like a spike in Western Silverware scrap. While industrial recycling also edges higher, the growth here is mainly associated with structural factors.
Our Methodology
To list the 10 Best Silver Mining Stocks to Buy Right Now, we used a screener and sifted through several online rankings. After extracting the list of silver mining stocks, we mentioned their upside potential, as of November 18. Finally, the stocks were ranked in ascending order of their hedge fund sentiments, as of Q3 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Aerial view of a gold mine, reflecting the company’s precious metals mining operations.
Coeur Mining, Inc. (NYSE:CDE)
Average Upside Potential: 33.1%
Number of Hedge Fund Holders: 28
Coeur Mining, Inc. (NYSE:CDE) explores precious metals in the US, Canada, and Mexico. It mainly explores gold, silver, zinc, and lead properties.
Coeur Mining, Inc. (NYSE:CDE)’s long-term strategic growth objectives should stem from the recent acquisition by its wholly-owned subsidiary of SilverCrest Metals Inc. The acquisition is expected to close in Q1 2025 and should materially enhance Coeur Mining, Inc. (NYSE:CDE)’s cost and cash flow profile and immediately accelerate its balance sheet de-leveraging initiative.
During Q3 2024, the company reduced its outstanding revolving credit facility balance by $50 million to $225 million, resulting in a total liquidity of $222 million, which includes $77 million of cash, and a net debt to EBITDA ratio below 2.0x for the first time in 3 years.
Along with Coeur Mining, Inc. (NYSE:CDE)’s growing silver production from the recently expanded Rochester mine in Nevada and Palmarejo underground mine in northern Mexico, the addition of Las Chispas should result in peer-leading 2025 silver production of ~21 million ounces from 5 North American operations, with ~56% of revenue generated from the US-based mines and ~40% of revenue from silver. Apart from the peer-leading silver production, the combined company is projected to produce ~432,000 ounces of gold next year.
Coeur Mining, Inc. (NYSE:CDE) also added that the combined company will generate ~$700 million of EBITDA and $350 million of FCF in 2025 at lower overall costs and increase the overall margins. BMO Capital Markets upped the price objective on the shares of Coeur Mining, Inc. (NYSE:CDE) from $7.50 to $8.00, giving an “Outperform” rating on 23rd September.
Overall, CDE ranks 3rd on our list of best silver mining stocks to buy right now. While we acknowledge the potential of CDE as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than CDE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.