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« Six Reasons why you should purchase silver now | Main | Silver prices in pictures »

Silver Wheaton Corporation Up 6.58% Today

slw chart 19 Feb 2011.JPG

Good Day Team and what a sparkling day it is. Where we are presently camped the sun is shining, we have a large pot of breakfast tea, the surf is up and Silver Wheaton Corporation (SLW) puts in a sprinters performance, up 6.58% or $2.42, to close at $39.19, not too bad for a large cap.

Taking a quick look at the chart we can see SLW has really gained some traction as it rallies on the back of improved silver prices, which were also up today 2.43% or $0.77 to close at $32.51. Another positive sign for SLW is that this gain was achieved during a very busy trading session on NYSE with a massive 23 million shares changing hands. Keep an eye on the RSI if it 'pops' above '70' that’s usually when the profit takers move in, however, there is still room to move higher and as we have seen in the past the technical indicators can remain high for extended periods of time.

Our view on silver remains unchanged and we are looking for the $35.00/oz level to be breached in short order, this move should propel SLW up and beyond its previous all time high of $42.34. When this happens and we say when, not if, SLW will be in uncharted waters with no over head resistance to speak of to hamper progress, so the stock price improvement will be dramatic.

To add some balance to this piece Thompson Reuters have SLW as neutral and Market Edge Second Opinion have it as Avoid, however, our target remains unchanged at $100.00 as per our article of the 6th November 2011.

Looking ahead we have the Q4 earnings report which is scheduled to be announced after market hours on Thursday, 3rd March 2011. Earnings estimates range from a low of 0.20 through a mean of 0.30 to a high of 0.38. If the results are perceived as good by the analysts then the stock price should reflect this with further gains. Conversely, the old adage of 'sell into good news' can take its toll on the stock price and if the earnings disappoint the analysts, the stock could be down graded and again experience some selling pressure. If that happens buy the dips and hold on for a wild ride.

Silver Wheaton Corporation trades on the New York Stock Exchange and the Toronto Stock Exchange under the symbol of SLW.

The Company has a market capitalization of $13.58 billion, with 346.56 million shares outstanding, a P/E of 62.61, a 52 week trading range of $14.10 to $42.34 with an average volume of 10-11 million shares traded, although there was a massive spike today of 23 million shares changing hands.

As an aside we did pen an article recently suggesting Silver Wheaton as a possible takeover target: Silver Wheaton Corporation: A Takeover Target? At that time its market cap was around the $9.17 billion, today it stands at $13.58 billion. We also wrote the following:

Now, if we consider that there are no takers and SLW goes from strength to strength, there could come a time when the target becomes the predator and decides to branch out by adding a major mining company to its own portfolio.

Just our musings of course, but stranger things have happened.

Now let your mind take a walk down Imagination Avenue, what if SLW adapted its business model to operate slightly differently, in that it went out and purchased a producer of base metals with a reasonable amount of silver being mined as a by product of their core business. They could then offer this asset to other base metal producers whereby they become owners/or operators of the mines with SLW owning the silver production. After all SLW has to do something with the cash and a dividend may appear to be a tad mundane for their creative minds. Your thoughts please!

Taking a spin around the silver space we have the table below which shows just how well some of the other silver producers did today.

silver chart 19 Feb 2011.JPG

To finish we have this piece by one of my favourite bands, Buddy Joe by Golden Earring, crank it up and sing along with it and smile you are a silver bug!

Over in the options pit we closed another winning trade today so we now have 65 winners out of 67 options trades, or a 97.00% success rate If you have any questions regarding these trades please address them through their site where they will be handled quickly and I hope efficiently.

sk chart 19 Feb 2011.JPG

The above progress chart is being updated constantly. However, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today, before we decide to cap membership.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

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Reader Comments (7)

After Hours: $39.45 + 0.26 (0.66%)
Feb 18, 7:58PM EST

February 18, 2011 | Unregistered CommenterSilver Prices

According to silver prices finished up $0.88 to close at $32.66

February 18, 2011 | Unregistered CommenterSilver Prices

Ok , so it is great to see the prices shooting up but I read the futures price is lower because producers are booking in their forward production at around these prices,so if that is so they will have nothing to sell at higher prices. If there is nothing to sell how can the price rise ?

February 19, 2011 | Unregistered Commentersilver bug

If you are correct then its a good reason not to invest in producers that forward sell their product, so invest in those don't forward sell silver.

February 19, 2011 | Unregistered CommenterSilver Prices

I agree but the how to find who is not forward selling I have no idea.

February 20, 2011 | Unregistered Commentersilver bug

Take the list of companies that you own and call them and ask them.

February 20, 2011 | Unregistered CommenterSilver Prices

I feel like an idiot, but I can't complain too much. I bought a SLW option with February expiration at strike 38. Recall that SLW went down near 30 in the middle of January. Well I felt so awful I just didn't even want to look at the brokerage account, so I figured I would just forget about it. Anyway I just got an email saying that I need to put up maintenance margin. I found out that the accounting department at the company was slow, and that my position had actually been exercised thus causing the margin call to be issued. The company liquidated my position at the top of the morning trading at 9:33 am; the share price sank after that. I think people really work hard for you when you owe them money for shares you bought. And I am thankful for that. Anyway I'm idiot, but I'm a happy idiot.

February 22, 2011 | Unregistered CommenterDavid

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