The Carnage In The Silver Miners Has Been Apocalyptic


from Silver Doctors:

The big wildcard is COVID-19-fear-driven government orders to shutter businesses and even the mines themselves…

by Adam Hamilton of Zeal LLC

The carnage in the silver miners’ stocks has been apocalyptic, fueled by the astounding COVID-19 stock panic.  As terrified traders frantically dumped everything and ran for the hills, silver and its miners’ stocks crashed.  That catastrophic anomaly has potentially created epic contrarian buying opportunities.  The silver miners’ recently-reported Q4’19 results reveal whether their fundamentals support a massive rebound.

As long-time silver-stock traders are painfully aware, this tiny sector is no stranger to adversity.  Only the most-hardened contrarians dare chasing the white metal’s occasional monster skyrocketings.  Back in late February, silver was rallying nicely as gold surged over $1600 on mushrooming COVID-19 fears.  But over the next 17 trading days silver collapsed 35.8%, with nearly 3/4ths of that loss in the final week alone!

Silver’s primary driver is gold, which plunged 9.3% in that devastating mid-March week crashing silver 28.5%.  That blasted the Gold/Silver Ratio to a crazy new all-time-record high of 124.1x, silver had never been more undervalued compared to gold!  In late February with gold near $1650, I had warned its $1600 breakout surge was peculiar and precarious lacking normal drivers.  Risks were high for a major selloff.

While that would hammer silver lower like usual, its resulting 10.9-year secular low of $11.96 on March 18th was shocking.  If sub-$12 silver somehow persisted, it would threaten the viability of many of the world’s silver mines.  But if the silver miners’ latest fundamental results suggest they can likely weather this pandemic superstorm, their upside potential as silver mean reverts much higher relative to gold is huge!

Because most silver miners logically run calendar financial years, Q4 reporting has an extended deadline up to 60 days after quarter-end in the US.  In other countries including Canada where silver stocks trade, the full-year due dates extend out to 90 days.  Annual reports including final quarters are bigger, more complex, and must be audited by independent CPAs.  Now major silver miners have finally reported Q4’19 results.

The definitive list of major silver stocks to analyze comes from this sector’s leading benchmark, the SIL Global X Silver Miners ETF.  Launched way back in April 2010, it has maintained a big first-mover lead ever since.  After every quarterly earnings season, I delve into the latest results from the top 17 SIL silver stocks.  That arbitrary number fits neatly in the table below, and represents a commanding 94.8% of SIL’s weighting.

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