Buy these stocks to profit from silver's rally, BofA says

By Tomi Kilgore

While 'pure play' silver exposure is hard to find, there are a couple stocks analyst Michael Widmer recommended buying

While it's hard to find stocks that offer "pure play" exposure to silver, BofA Securities analyst Michael Widmer recommended on Wednesday a couple that investors could buy to ride the continued rally in the precious metal.

Silver futures (SI00) have run up 22.8% over the past three months, compared with an 8.4% rally in gold futures (GC00) and the S&P 500 index's SPX 5% gain.

Despite silver's already "notable" recent gains, Widmer said he is still bullish into the second half of 2024 and into 2025. He estimates that silver prices will average $35 an ounce in 2026, which is about 17% above current futures prices.

Widmer said that with the global economy "turning a corner," industrial demand for silver should continue to increase. He believes the "white metal" should get additional support as demand for next-generation solar panels, which are more silver intensive, gains traction.

But "pure play" exposure to silver for equity investors is relatively rare, Widmer said. He noted that silver is seldom found alone in mines, and some of the largest holders of silver assets are diversified miners with "mostly nominal" silver holdings relative to those of other precious metals.

"Unlike gold, 'pure' silver exposure via mining equity investments is difficult to find given the nature of its mining," Widmer wrote in a note to clients. "Silver is often a by-product or a co-product of mines where other metals (copper, gold, lead, and zinc, predominantly) are the primary commodity produced."

Among North America stocks he rates buy for silver exposure include those of Canada-based Pan American Silver Corp. (PAAS) (CA:PAAS) and Wheaton Precious Metals Corp. (WPM) (CA:WPM).

Pan American's U.S.-listed stock rose 1.8% in afternoon trading, and has soared 46.1% over the past three months.

"[Pan American] is catalyst-rich, has a solid balance sheet, offers solid production growth with solid upside potential across various assets in the portfolio," Widmer wrote.

Wheaton shares tacked on 0.8% in Wednesday trading, and have hiked up 20.5% over the past three months.

"[Wheaton] is a precious metals royalty and streaming company, and derives a sizable 36% of its [estimated] 2024 revenues from silver," Widmer wrote.

Besides company shares, investors can also get silver exposure through the iShares Silver Trust ETF SLV, which tracks silver prices. The ETF was up 1.9% in recent trading, and has climbed 23.2% over the past three months.

-Tomi Kilgore

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

06-12-24 1459ET

Copyright (c) 2024 Dow Jones & Company, Inc.