Silvercorp Metals Inc. (SVM): Can This Punished Silver Miner Rise?

The company has a well-diversified portfolio of assets. It has gained exposure to gold with a recent Vale deal. Silver Wheaton has acquired rights to purchase 25% of gold production from the Salobo mine in Brazil and 70% of gold production from the Sudbury mine in Canada. Salobo will add 60,000 ounces of gold annually, while Sudbury will bring 50,000 ounces. With the help of these two mines, Silver Wheaton more than doubles its gold exposure. Silver Wheaton Corp. (NYSE:SLW) trades at 14.1 trailing P/E and slightly less than 12.0 forward P/E. Its unique business model makes the company an interesting addition to an investor’s portfolio.

Silver Standard Resources Inc. (USA) (NASDAQ:SSRI) is the most punished silver stock. It is down 53% year-to-date. Often, the stocks that were punished the most lead the rebound. Silver Standard Resources Inc. (USA) (NASDAQ:SSRI) missed analysts’ estimates in the most recent quarter. The company reported a loss of $0.06 per share compared with an estimate of $0.02 per share. The company is projected to post a loss of $0.04 per share in the second quarter of 2012. Silver Standard Resources Inc. (USA) (NASDAQ:SSRI) is a risky play, as the company is expected to post a loss in 2014. In its first quarter earnings call,  the company stated that it plans to continue to battle costs, as they are the source of the problem. Analysts would like to see more on the cost-front from the company before changing their estimates.

Bottom line

Silvercorp Metals Inc. (NYSE:SVM) presents an interesting way to play silver. The company is free of debt, and is expected to report profit for the fiscal 2014. The stock trades at a 17.2 P/E and an attractive 9.4 forward P/E. It is important to mention that the stock is risky because it is cheap. It is very easy for the stock to move 10% up or down in just one day. The fact that silver prices are volatile now adds to the volatility of the stock. If you are comfortable with that, you can consider adding Silvercorp Metals Inc. (NYSE:SVM) to your portfolio.

Vladimir Zernov has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Can This Punished Silver Miner Rise? originally appeared on Fool.com.

Vladimir is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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