Recent Buy – Silver Wheaton Corp

This will be another quick update on my recent purchase. As most are aware, its been a bloodbath in the precious metals space after the interest rate raise. The raise was almost 100% guaranteed, and continued strength in the US$ was also guaranteed. So I was waiting for this event to unfold before I made the next purchase in the precious metals space.

Thanks to a more hawkish note from the Fed — that they will raise interest rates 3 times next year (we’ll see if there is any weight to that…since they also promised us 4 raises this year); there was increased volatility and we saw a mini-correction in bond substitutes such as REITs and precious metals as the US$ surged. The DXY reached a high of 103 post-announcement.

Watching the bloodbath all day, it was too hard to pass up on the opportunity and I decided to buy and add to my Silver Wheaton Corp (SLW) position after it fell 9% on the day.

I bought 100 shares of Silver Wheaton Corp (SLW) at US$17.00. This purchase adds US$24 to my forward dividend income.

However, I┬ádecided to use my US$ in the investment account instead of the CAD$, so I have both SLW and SLW.TO currently — but for the most post, I will treat them as the same on this blog going forward.

Silver continues to languish and is currently hovering at the $15-16 handle, which I believe is an extremely attractive price for this chameleon metal — which acts both as a precious metal and as an industrial metal. To read more about the company itself, I will simply link to my original post where I profiled Silver Wheaton.

Recent Buy – Silver Wheaton Corp

Have you made any moves post-rate raise? Share your thoughts below.

6 thoughts on “Recent Buy – Silver Wheaton Corp

  1. helen7777 says:

    Suggestion: In the titles of your “Recent Buy” articles, would you please show the stock symbol? It will help those of us who keep and file your articles.

  2. Thanks for the updates. Precious metals have been rough lately. I am also skeptical that the Fed will go ahead with 3 rate hikes, especially after only raising once this year. The dollar strength has also been pretty impressive. Maybe it’s just the best house on a horrible block flooded with fiat garbage?… ­čÖé

  3. I didn’t do any sort of analysis, I just checked them out on the Yahoo Finance app, but I have a question: Is there an alternate way of valuing/analyzing streaming companies? Like there is with REITs, MLPs, and BDCs? The reason I asked is because their P/E is about 548, their EPS is 0.03, and their dividend is 0.24. Those don’t look like happy numbers to me, but I know that certain industry’s business models Renee those numbers unreliable.

    Sincerely,
    ARB–Angry Retail Banker

    • Hi ARB,
      Like you have observed, you cannot use the traditional PE, EPS numbers in valuing the business. Mining and the related streaming/royalty businesses are valued very differently. Mining companies themselves have a limited time to function and extract from a mine — and the resource depletes more with operation each day. With streaming/royalty companies, it depends on how each of the deal with the mining companies are structured. The gross royalties (or royalty per share) is a bit hard to find, but in SLW the average contract allows to them to buy silver at $4/oz and gold at $400/oz. Again, there are a lot of nuances each deal. Some details can be found here: http://s1.q4cdn.com/474160313/files/docs_presentations/2016/nov/SILV_AssetHandbook_FINAL_Web_Nov2016.pdf

      cheers
      R2R

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