Pan American Silver Corp. Continues To Outperform
Silver and gold stocks have outperformed the equity markets this past week, as investors rotate their money into safe haven such as precious metals amid worries that the coronavirus could disrupt global growth. Gold has exceeded the whole round number of $1600 and although silver doesn’t get a lot of headlines, silver prices have breached the $18 level.
Pan American Silver Corp., together with its subsidiaries, engages in the exploration, development, extraction, processing, refining, and reclamation of silver mines. It also produces and sells gold, zinc, lead, and copper.
You may have never heard of Pan American Silver, but the Smart Money knows this company very well. Over 60% of the outstanding shares are owned by institutional investors such as Van Eck Associates Corporation, Renaissance Technologies Corp. and BlackRock. I have never heard of Van Eck Associates, but very familiar with Renaissance Technologies Corp. and BlackRock.
Renaissance Technologies is a quantitative investment management company which dedicated to digesting data, building mathematical models to anticipate the direction of various assets. The hedge fund put the quant in quant trading. Renaissance manages $65 billion, making it one of the largest hedge-fund firms in the world.
BlackRock, Inc. is a global investment management corporation based out of New York City. Originally, the company focused on risk management and fixed income, but since has branched out to provide other services. Today, BlackRock is the world's largest asset manager, with $7.4 trillion in assets under management. Have you heard of the ETF, the IWM, that’s all BlackRock? The IWM is an ETF that mimics the performance of the Russell 200 Index. Today, Blackrock is the world's largest asset manager, with $7.4 trillion in assets under management
Lets get back to Pan American Silver Corp. Shares of Pan American Silver have increased 38% over the past quarter and have gained 50% in the last year vs. a 28% gain for the S&P 500 in 2019. In addition, over the past two months, their earnings estimates have moved higher for the year.
The other day the company reported earnings. Earnings during the fourth quarter were put at $68.9 million, or 33 cents per share, compared to a net loss of $2 million, or a penny, in the same quarter of 2018. In addition, net earnings in the October-January period were $51.7 million, or 25 cents a share, a turnaround from a loss of $63.6 million, or 42 cents, a year earlier.
"Strong, low cost production generated operational cash flow of $282 million in 2019, which allowed Pan American to retire $60 million of debt, dividend approximately $29 million to shareholders, invest in new projects such as our La Colorada skarn discovery, and increase our cash position," said Michael Steinmann , President and Chief Executive Officer of the Company. "In 2020, we are expecting silver and gold production growth of approximately 7% and 16%, respectively.
I personally think, Pan America Silver is just getting started after breaching the longer term downtrend line and the major support / resistance band some months ago.
Thus, the chart suggests to look for price to move higher with a short term target at $28.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Posted via Steemleo