Sunday, June 30, 2013

"Are we there yet? Are we there yet on the end of the slide in Gold, Silver, and Copper? Well if we're not, then we are pretty darn close. Close enough to buy FCX and SLW"

Dow Jones Industrial Average 14.799.40  (That is not a typo, Way DOWN) Week ending 06-21-2013

Bart Simpson: "Are we there Yet?",  Homer Simpson:"No!"  
But in the case of Freeport McMoran (Symbol FCX) and Silver Wheaton (Symbol SLW), you can start to accumulate some positions in their stocks. 

Remember, my blog's tenet is to look for 1 year to 3 year investments. These investments mentioned above will experience turbulence over the next 6 months, but I think a lot of the speculators have been rung out of the market. 
Also with all the quantitative easing liquidity pumped into the market, there is no doubt that commodity inflation is bound to be in our future.

Freeport -McMoRan Copper & Gold (Symbol FCX , $27.61)

is also diversified with owning two oil exploration companies. They currently pay right up front a 4.53% dividend.  Freeport-McMoRan is projecting 2013 earnings of $3.05 per share and 2014 is looking like $3.82 per share. Last year, the company had revenues of almost 18 Billion dollars for the year. 

The Return on Equity is 18.48% and the PEG ratio is 0.68, so this is a perfect pick by my parameters. The forward PE is a low 7.54.  Even if you have some short term hits on earnings in the stock for a couple of quarters, this one is a long term winner.

Silver Wheaton (Symbol SLW, $19.67) is your silver pick. Silver Wheaton Corp. is a precious metal streaming company. It is engaged in the exploration of silver and gold. The company explores silver through the Luismin, 
Zinkgruvan, Yauliyacu, Peñasquito, Cozamin, Barrick and Other mines and the silver and gold 
through the Minto mine and corporate operations. Its subsidiaries include Silver Wheaton 
Caymans Ltd. and Silverstone Resources Barbados Corp. 

SLW pays a 2.4% dividend up front. The Return on Equity is 20.21% and the PEG Ratio is 0.63, so very fine numbers. The company had revenues last year of 856 Million dollars with Gross profit margins of 66.88%.

2013 Earnings are looking like $1.50 per share and for 2014, should be around $1.62 per share. The forward PE is 11.19. Good time to put some silver in your portfolio.
The key to silver is that it is used commercially for electronics and that there is limited future supply. Buy some FCX and SLW in small parcels and build a position.

Bart says, "Count your chickens as they hatch." 

Freewilly says, "You need to have a carton of eggs in hand first and then you will surely end up with chickens."


No comments:

Post a Comment