Will Silver Wheaton Recover from Its Recent Fall?

Shares of Silver Wheaton Corp. (SLW) haven’t performed well in the past month: The stock fell by 16% since the beginning of September (up-to-date). The recent decline in the price of silver may have contributed to fall of this company’s stock. Furthermore, other precious metals investments such as iShares Silver Trust (SLV), SPDR Gold Trust (GLD) and Barrick Gold (ABX) have also plummeted in the past several weeks during the month. Will Silver Wheaton bounce back from its tumble? Let’s analyze the latest changes related to Silver Wheaton.

Third quarter results

The company is likely to publish its third quarter earnings report during the first week of November and announce the exact date in the next several days. Until then, let’s analyze the expected developments in Silver Wheaton’s revenues and productions.

According to the company’s forecasts, production of gold and silver in the first two quarters of 2013, and the shifts in the prices of bullion, I guess the company’s revenues will rise in the third quarter compared to the parallel quarter in 2012. The main reason for the rise in revenues is due to the company’s higher gold production. Conversely, the drop in silver production and precious metals’ prices are likely to curb down the rise in revenues.

The sharp drop in the price of silver will offset the potential rise in silver sales (in ounces). 

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Disclaimer: The author holds no positions in stocks mentioned and does not plan to initiate positions within 120 hours of the posting of this article. This article is to be used for educational, research and informational purposes only and does not constitute investment advice. There are no guarantees, expressed or implied, of future positive returns in regards to the subject matter contained herein. Understand the risks inherent in investing before making the decision to invest or consult an investment professional for more information. Reasonable due diligence has been performed in regards to the information in this article. However, the author expressly disclaims any liability for accidental omissions of information or errors in fact.