Investors are like children: They all want to be astronauts when they grow up. I jest, but in truth I'm sure every investor would enjoy seeing any one of their individual stocks launch beyond the stratosphere like a powerful, multistage rocket.
For those who moved to the gold and silver launch pad last September when I forecast a looming takeoff for mining stocks, the ensuing mission is likely to have yielded some exhilarating success. For silver miners in particular, successive booster rockets like the silver manipulation bombshell, Ben Bernanke's QE2, and the Presidents Day silver short squeeze have sustained an impressive upward trajectory.
Shares of recent Big Board inductee First Majestic Silver (NYSE: AG) have promptly tripled since mid-September. Pan American Silver's (Nasdaq: PAAS) stock has doubled, while that of silver-streaming superstar Silver Wheaton (NYSE: SLW) has ascended another 75% atop an epic prior increase of 850% (from a multiyear low notched in November 2008).
Climbing aboard any vehicle moving at supersonic speed is not for the faint of heart, but I believe that quality silver producers will continue to generate long-term outperformance as silver progresses toward my target price of $50 per ounce. In fact, I have predicted that my CAPS pick of the Global X Silver Miners ETF (NYSE: SIL) will outperform the S&P 500 by 200%.
Fools seeking to add silver exposure amid silver's momentous ascent may wish to seek relative peace of mind by targeting companies with aggressive growth profiles that erect a foundation of shareholder value beneath these share-price advances. Silver Wheaton, which is targeting 80% production growth over the next five years, offers one prime example. Endeavour Silver (AMEX: EXK), whose stock has advanced more than 150% since I asked Fools to pinpoint a major growth spurt last August, continues to entice shareholders with multiple avenues for growth looking forward.
Following exciting exploration success during 2010, Endeavour has opted to expand capacity at its Guanajuato processing plant by 67%, from 600 to 1,000 tons per day. The company expects to boost production by 12% in 2011 to reach 4.7 million ounces of silver equivalent (including gold), and sees operating profit margin surpassing $18 for each of those ounces (even using a decidedly conservative silver price forecast of $24 per ounce).
This week, the company released a new resource estimate for its most advanced exploration project: the Parral project in Chihuahua State, Mexico. With an indicated resource fast approaching 4 million ounces of recoverable silver equivalent, Parral's prospects are shaping up nicely, and the company will now commission a preliminary economic analysis to help guide future efforts.
Interestingly, Endeavour has also taken on a consultant "to identify and evaluate potential mergers and acquisition opportunities to facilitate Endeavour's future growth." Atop the strength of Endeavour's proven management team, which managed to avoid shareholder dilution effectively through previous rounds of growth, Endeavour's multitiered commitment to generating accretive growth renders this small-cap miner one truly enticing choice of vehicles for riding the silver rocket.
If the never-boring silver mining industry piques your Foolish curiosity, be sure to add these stocks to your free, personalized watchlist and follow all the precious news to come.
- Add Endeavour Silver to My Watchlist.
- Add Silver Wheaton to My Watchlist.
- Add First Majestic Silver to My Watchlist.
- Add Pan American Silver to My Watchlist.
- Add Global X Silver Miners ETF to My Watchlist.
