Silver Wheaton Corporation (SLW)

Stock of the Day – Case Study

Silver Wheaton Corporation
Silver Wheaton Corp., a mining company, engages in the silver production. It purchases silver from Luismin mines in Mexico and the Zinkgruvan mine in Sweden, as well as purchases silver from the Yauliyacu Mine in Peru.

010307_slw_daily.png

SLW – 10.48
The young stock is showing solid support above the 200-d m.a. with a breakout above $12.21 (resistance zone above $12 as shown in the weekly chart). The ideal entry is a move above $12.50 on the point and figure chart. Some may consider the current area an entry along the 200-d m.a.

Support also sits above $8 if the stock happens to violate the 200-d m.a. This support dates back to the trendline violation in May 2006.

2006 Return: 81.3%
52-week Range: $12.21 – $5.54

Earnings:
2006:
Q1: 0.07
Q2: 0.11
Q3: 0.09
Q4: —

2005:
Q1: 0.03
Q2: 0.04
Q3: 0.04
Q4: 0.04
Yearly: 0.15

2004:
Yearly: 0.02

**Click Image to Enlarge**
010307_slw_weekly.png

* All numbers in Millions
Revenue (yearly):
2006:
Q1: 25.17
Q2: 47.41
Q3: 41.77
Q4: —

2005:
Q1: 16.08
Q2: 19.26
Q3: 18.08
Q4: 17.47
Yearly: 70.90

2004:
Yearly: 10.99

ROE: 12.1%

Net Income:
2005: 25.3
2004: -0.05

Cash:
2005: 118
2004: 0.32

Cash Flow:
2005: 31.3
2004: 0.74

Number of Institutions:
Money Market: 69
Mutual Fund: 28
All Others: 5

Top Holder: Capital Research and Management Company
2.5 mil shares or $26 million
Total Equity Value of Portfolio: $554 billion

Comments

  1. What about RS rating? Weak market demands higher RS readings which this stock does not have. Also, weak acc/dis profile and group chart looks weak. I know you can do better.

  2. Sheldon,
    You are right – the RS is currently weak and the group is nothing to write home about but I am looking at the trading range and the past history of the young stock.

    The stock did gain 51% from September to November but has since hit the resistance from the weekly chart.

    The RS was 99 in 2005 and early 2006. I don’t own the stock but will buy according to what I say in the post.

    We’ll see what happens – the stock may fall-over and never give the entry opportunity I am looking for.

  3. Rich Illing says:

    Very insightful. So the price will go up if it stays above the 200 dma, and the price will go down if it drops below the 200 dma. Can I then conclude that the price will go up if the price goes up and the price will go down if the price goes down?

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