All the glitter isn’t gold. Have the silver mining stocks lost their shimmer? If you’ve spent time looking at silver mining stocks, you’d realize they are slowly disappearing off the radar.
Perhaps it is due to the expenses of owning and operating silver mines. The telltale sign of their decline was reflected in the number of pure silver mines. The last time I checked, only about twenty were in the world.
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Table of Contents
List of the Best Silver Mining Stocks
| Symbol | Name |
|---|---|
| WPM | Wheaton Precious Metals Corp. |
| AG | First Majestic Silver Corp. |
| PAAS | Pan American Silver Corp. |
| EXK | Endeavour Silver Corp |
| HL | Hecla Mining Company |
Silver Mining Stocks Introduction
In the past seven years, the price of silver has dropped significantly. We’ve seen a drop from around $35 per ounce in 2011 to about $18 today.
Understandably, this significant drop has left investors wondering if silvers are undervalued. Some investors believe the answer is “yes” — but are they right?
Where does that leave us? Should you invest in silver or chase the gold? Check out our stock sectors list for stocks moving in all market conditions.
Reasons to Invest in Silver Mining Stocks
A high gold–to–silver ratio. In laypeople’s terms, the gold: silver ratio refers to how many ounces of silver you’ll need to purchase one ounce of gold.
A high gold: silver ratio means silver is a good buy since it is considered cheap relative to gold.
Check out our trade room, where we discuss precious metals, among other stocks.
1. Silver Is Under Valued
Silver mining stocks have been for quite some time. When you look at the gold-to-silver ratio now, it stands at a staggering 1:86.
Put another way, you need 86 ounces of silver to buy only one ounce of gold. If you look at the charts, you’ll see that silver has been consolidating for several years and is still below all-time highs of roughly $50 per ounce.
History repeats itself, and the gold and silver ratios are no exception. For example, in 1942, the ratio stood at 1:97 but quickly fell to 1:43 in 1946.
In 1968, it was at an incredible 1:18. On a side note when we considered silver money, it was at 16! In the last 20 years, the usual level was 1:60.
When we have a spike in the ratio, it is followed by a retracement back to typical levels. In other words, this shows silver is due for a return to normal levels, which means the prices are increasing.
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4. Silver Is Rare
Silver is rare, and it’s not stockpiled in a warehouse. The amount of silver bullion inventory available for sale is minuscule compared to gold bullion (about 1%).
That can give silver mining stocks some great value. And we all want great value, especially if we’re putting precious metals into our portfolio.
Check out our stock watch lists as we put precious metals on there when the setups are there.
3. Silver Is a Precious Metal
Silver is a consumable precious metal. Next to copper, silver is the most critical commodity in the industrial world. About 80% of the silver mined heads to a fabrication facility.
The metal is used to produce technological devices such as manufacturing calculators, RFID chips, mobile phone batteries, etc.
And we all know our devices aren’t going anywhere soon, and demand will continue to rise. That means, again, the higher silver price. Next-level stock training can help take advantage of any growing demand.
4. Diversification
Silver can diversify your portfolio because it correlates poorly with other asset classes, such as stocks and bonds. Adding silver to a portfolio can help reduce overall risk and volatility.
5. Hedge Against Inflation
Silver is a hedge against inflation during uncertain economic times and rising prices, just like gold. Historically, it has been a stable investment option, retaining its value and purchasing power as time passes. This makes it an attractive choice for those who are worried about inflation. And let’s be honest, in these crazy times, who isn’t worried about inflation?
6. More Affordable Than Gold
Compared to gold, silver is more affordable. The spot cost of gold is $2032.65 per ounce, whereas silver is $23.18 per ounce. That’s a significant difference!
Silver’s affordability makes it a popular choice for investors with a small budget. Due to its lower price, investors can consider purchasing silver as an alternative to gold, making it more affordable and accessible to anyone.
7. Silver Is in High Demand
Silver is expected to be in high demand across various sectors, such as industry. The Silver Institute forecasts that global silver demand will reach 1.2 billion ounces in 2024, the second-highest level on record.
8. Potential for Price Appreciation
As I mentioned above, experts predict that the price of silver might soar due to its high demand. Silver remains a popular choice for investment as its demand continues to rise in the solar and electrification sectors. It has a range of industrial applications in electronics, solar panels, and medical equipment. This increased demand can positively impact the price of silver, making it an attractive place to invest your money.
List of Silver Mining ETFs
Several popular silver ETFs are on the market if you want to go the ETF route.
iShares Silver Trust (SLV): One of the largest and most popular silver ETFs, it provides exposure to silver’s price movements.
Aberdeen Standard Physical Silver Shares ETF (SIVR): This ETF aims to track the performance of the price of physical silver by holding physical silver bullions.
Invesco DB Silver Fund (DBS): This ETF tracks the performance of the DBIQ Optimum Yield Silver Index Excess Return, which reflects the potential returns of the silver futures market.
ProShares Ultra Silver ETF (AGQ): Designed for investors who seek leveraged exposure to silver, this ETF aims to provide twice the daily performance of silver bullion.
First Majestic owns 100% of six producing mines in Mexico and is one of the few large pure silver miners. Twenty-five million oz. of silver is slated for production in 2020 alone.
Equally important, in Q3 2019, the company reported EPS of $0.04, up from $0.03 in 2018.
During the first nine months of 2019, EPS was zero, but an improvement from a loss of $0.22 in 2018.
Will Silver Ever Be Worth as Much as Gold?
A common question many people ask is whether silver will ever be worth as much as gold. Unless something happens with our economic system or fiat currency, the chances of silver being more than gold are slim. However, silver does move up with the price of gold.
Supply Deficits for Silver Mining Stocks
There is a silver shortage. Do you remember what happened with the palladium shortage? Before the shortage, Palladium cost around $300 per oz; today, it is worth more than gold!
There are very few silver mines – at least reputable ones. With only a handful worldwide, this creates an enormous investing opportunity.
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How to Invest in Silver Mining Stocks
If you want a simpler and less risky approach to buying silver mining stocks, I suggest purchasing an exchange-traded fund (ETF). An ETF offers you an easy way to gain exposure to silver without owning the actual commodity. They are very popular to trade and less risky than trading silver mining penny stocks.
The good news is that several silver and silver-mining funds do a great job of tracking the metal’s gains and losses.
In particular, you might want to check out the Global X Silver Miners ETF (SIL). The SIL ETF tracks an index of global silver mining companies and provides investors access to a broad range of silver mining companies.
Now, investors can sleep soundly as this fund has liquidity. With average daily volumes of approximately $2.74 million, SIL has the liquidity needed in this volatile market.
However, with 23 equities in the fund’s portfolio, the expenses are higher than a straight silver ETF.
Mining Companies
Investing in silver can be done by buying stocks in companies that mine silver. Such companies are responsible for exploring, extracting, and producing silver. By investing in such stocks, you can indirectly get involved in the silver market.
Silver-focused Mutual Funds
Mutual funds specializing in silver-related companies or commodities can also be an option. These funds pool money from multiple investors to invest in a diversified portfolio of silver stocks or other silver-related securities.
Exchange-traded funds (ETFs)
Silver ETFs are investment funds that track the performance of silver-related indexes or the price of silver itself. These ETFs can be bought and sold on stock exchanges, making them a convenient option..
iShares Silver Trust ($SLV) TipRanks Stock Forecast Report 3/24
Final Thoughts
There is no doubt in my mind that silver is undervalued, and it’s time to chase it. Now is the time to invest and trade in silver mining stocks before the sparkle disappears. How long will silver remain a bargain? Only time will tell.
The important lesson for today: The silver window is open. Now. Play it smart. Head to our website for thousands of dollars’ worth of free online trading courses. And — as with so much in life — timing is everything.
Frequently Asked Questions
Investors often consider silver a safe investment, just like gold, especially during uncertain times. It acts as a hedge against inflation. Investors can gain exposure to silver mines by buying stock in silver mining companies.
According to WallStreetZen's Valuation Score, MAG Silver (NYSEMKT: MAG) is currently the most undervalued silver stock. The company has a valuation score of 43, significantly higher than the industry average of 29. It has successfully cleared 3 out of 7 valuation due diligence checks. MAG Silver's stock has experienced a significant drop of -32.42% in the past year.
In 2022, Ontario produced the most silver in Canada, totalling 129.93 metric tons.
Yes. Warren Buffett purchased nearly 3,500 tons (111 million ounces) of silver through Berkshire Hathaway in 1997, which turned Thomas Kaplan into a billionaire.
