Why Silver Wheaton Is Poised to Bounce Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, silver royalty holding company Silver Wheaton (NYSE: SLW  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Silver Wheaton and see what CAPS investors are saying about the stock right now.

Silver Wheaton facts

Headquarters (founded)

Vancouver, Canada (2004)

Market Cap

$8.0 billion

Industry

Precious metals and minerals

Trailing-12-Month Revenue

$849.6 million

Management

Co-Founder/CEO Randy Smallwood

CFO Gary Brown

Return on Capital (average, past 3 years)

16.8%

Cash/Debt

$778.2 million / $50.1 million

Dividend Yield

2.5%

Competitors

Goldcorp

Hecla Mining

Pan American Silver

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 2,758 members who have rated Ford believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, Googlespooch, tapped the stock as a particularly attractive bargain opportunity:

With this big precious metals short position that has been fulfilled by the mega banks, I feel that we are bottoming out on the commodity plays and headed for more positive futures. In saying that, I believe that Silver Wheaton will do well. Silver Wheaton works based on a really interesting royalty system in which they provide much of the upfront cost of development and then are able to buy silver at contract prices that allow for serious profit on each individual transaction in order to recoup the initial costs. In doing so, Silver Wheaton presents a nearly pure play on silver. With silver already so beat down, it should seem like it will be hitting a floor soon (if it has not already) and come back over the coming time periods. Besides, Silver Wheaton pays a decent dividend so you can be rewarded with some income while you wait for the recovery.

If you are looking for a company whose success is determined by the metals market, but without involving itself in the risks of physically mining the metals, then Silver Wheaton provides a unique play on the future of silver. SLW chooses to finance the mining of silver; it has grown sales and net income every year since 2008, and also has increased competitive advantages over its limited peer group. To learn more about Silver Wheaton, click here now to access The Motley Fool's premium research report on the company.


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