New York, New York (PressExposure) February 29, 2012 -- Sasha Cekerevac, co-editor for financial web site and newsletter Penny Stock Detectives, believes that, after a volatile 2011, silver is now setting the stage for the resumption of its bull run upward. Cekerevac argues that, as the price of silver goes up, so will silver miners, with silver penny stocks set to outperform the rise in silver by a large margin.
Cekerevac found one interesting penny stock miner-Silvercorp Metals Inc.-which he discusses in his recent Penny Stock Detectives article (see it here). Of the mining companies in China, Silvercorp Metals is the largest silver producer. Just recently, the firm announced guidance for its fiscal year ending March 2013, in which it forecasted silver production to increase by 20%, in addition to 90% more production in gold. This would be the eighth straight year of silver production increases. This silver firm doesn't have any debt and even issues a dividend, with a forward yield of 1.4%. This is a rare combination, according to Cekerevac
"When looking at penny stocks, you want to find companies that have strong management who can grow revenue and production and do so with little to no debt, that manage their cash positively, such as by issuing dividends, and that are in an industry that's growing, like silver," notes Cekerevac.
In all of these categories, Silvercorp Metals is a winner. The only possible issue is an alleged complaint by a short-seller stating that the firm was misrepresenting its profits and cash position. Silvercorp Metals has posted its financial statements and called the allegation by the anonymous short seller a "manipulative scheme."
Among silver mining companies, Hecla Mining Company is also very interesting in Cekerevac's opinion. He believes that, having a 52 week range of $4.25-$11.08, it's offering long-term investors an opportunity to accumulate one of the cheaper silver penny stocks. With Hecla's stock trading at a forward price-earnings ratio of just over 12 and a forward dividend yield of 1.6%, a move up in silver prices will be a huge driver for this firm, according to Cekerevac. Hecla has very low debt at only $7.5 million, a large cash pile of $413 million, and a profit margin of 24.13%.
"All of these are good places to start when looking at silver mining companies," comments Cekerevac, "as these fundamentals show that management is able to effectively run the business. Cekerevac ends by saying that he loves getting paid a dividend, "as you get paid to wait while these silver mining companies dig up the goods."
Published every business day, Penny Stock Detectives researches and analyzes low-priced opportunities in the stock market and individual stock market sectors. Penny Stock Detectives reports on penny stocks, small-cap stocks, micro-cap stocks, high-profit potential plays mostly under $10 and the stock market in general.
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