Wheaton Precious Metals: A Royalty Buy

02/26/2020 5:00 am EST

Focus: COMMODITIES

Leo Fasciocco

Investment Columnist and Publisher, Ticker Tape Digest

Wheaton Precious Metals (WPM), formerly Silver Wheaton Corp, is a Vancouver, Canada-based pure precious metals streaming company engaged in the sale of silver and gold, explains Leo Fasciocco, editor of Ticker Tape Digest.

With annual revenues of $794 million, the company operates via silver produced by the San Dimas, Penasquito and Antamina mines, the gold produced by the Sudbury and Salobo mines, the silver and gold produced by the Constancia mine and other mines.

WPM has entered into long-term purchase agreements and early deposit long-term purchase agreements whereby WPM acquires silver and gold production at various mines.

Over the last 12 months, the stock is up 45% versus a 22% gain for the overall stock market. The stock has climbed from $25 back in October to a peak around $30 by December.

Technically, the shares put down a flat with a wedge to the upside. The recent upside breakout is impressive coming with a widening of the daily spread and expansion in volume. The stock's momentum indicator is strongly bullish.   

The stock sells with a price-earnings ratio of 54. That is high given the growth rates. Net for the fourth quarter should surge 125% to 18 cents a share from the 8 cents the year before.

Looking out to 2020, the Street predicts a 59% surge in net to 90 cents a share from  the anticipated 57 cents this year. For the first quarter of 2020, the Street predicts a 54% leap in net to 20 cents a share from the 13 cents the year before.

The stock is most suitable for aggressive bulls. We are targeting a move to $38 within the next few months, or soon. A protective stop can be placed near $29.

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