5 Silver Mining Stocks Near 52-Week Highs Worth Buying
Zacks Investment Research | Jul 10, 2016 09:18PM ET
Silver prices are currently hovering above the $20 mark, thanks to Brexit-related uncertainty and concerns about global economic growth. Volatile equity markets, a weaker U.S. dollar and a jittery oil market have also favored this precious white metal, which has surged 47% so far this year.
The white metal is usually considered a store of wealth and an alternative investment to risky assets in times of uncertainly. Investors’ interest in silver mining stocks has also been rekindled with recent signs of improvement witnessed in manufacturing activities in the U.S. Further, the uncertainty related to the Fed’s interest rate policy has been driving silver prices higher. A delay in raising interest rates elevates demand for precious metals, including silver, which produce no income but rely on price appreciation to lure investors.
Global mine supply production is projected to fall 5% in 2016 – the first drop in silver mine production worldwide since 2002. On the demand front, silver has multiple industrial applications. Demand is expected to rise this year. Thus, we are looking at a potential silver deficit, which in turn provides us with a solid ground for silver price gains this year.
The silver mining industry is currently ranked as the 10th best out of the 265 industries covered by Zacks. We believe investing in silver stocks now would be a prudent move given the tailwinds driving the precious metal.
Why Invest in Stocks Reaching 52-Week Highs?
The 'old-school' investors may be skeptical of buying stocks that have already bumped up their year-long highs. However, high valuations and rise in share prices do not always mean that the stock has reached its potential limit.
A strong price increase implies robust demand for the stock, which is often explained by either a good earnings performance or some positive news, which may further boost the stock price. This may carry the momentum forward a little longer, making it the ideal time for investors to get on board.
Our Picks
Today, we have shortlisted five silver mining stocks that are worthy of a place in an investor’s portfolio. Armed with a solid Zacks Rank and presently trading near their 52-week highs, these stocks appear ready to break out and chart new year-long highs.
Compania de Minas Buenaventura S.A.A. (NYSE:BVN) : This leading mining company produces precious metals and has mining rights in Peru. The stock, with a Zacks Rank #2 (Buy), has surged roughly 202.8% so far this year. The company closed at $12.96 on Friday, near its 52-week high price of $13.00.
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