A Silver Stock Ready To Shine

| About: Pan American (PAAS)

Pan American Silver Corporation (NASDAQ:PAAS) has been in the news recently. It has received a lot of positive comments from analysts and financial pundits in the last week or so. In addition, silver in general has been getting a lot of love from various sources. It could be a good time to load up on this cheap silver miner.

Recent positive comments/catalysts for PAAS:

  • Deutsche Bank upgraded the shares earlier this month from hold to buy and upped its price target to $26 a share from $22.
  • The CEO of Silver Wheaton (NYSE:SLW) was on CNBC the other day. He is predicting at least $40 an ounce silver in 2013, perhaps as high as $50 an ounce due to the Fed's money printing.
  • The Street also believes QE will be good for this silver company.
  • Guy Adami also called the stock out as his final trade Friday on Fast Money.
  • Finally, hedge funds are more bullish on silver than they have been in 7 months.

Pan American Silver Corp is a mid-cap silver miner based in Canada. It produces and sells silver, gold, copper, lead, and zinc and has seven mining operations in Latin America.

4 additional reasons PAAS is a solid pick up at $21 a share:

  1. Analysts expect 15% to 20% revenue growth for both FY2012 and FY2013. The company has averaged 26% annual growth in sales over the past five years.
  2. The stock is selling near the bottom of its five year valuation range based on P/E, P/S, P/B and P/CF. PAAS sells at just 17% above book value.
  3. The company has a solid balance sheet with over $400mm of net cash on the books (just less than 15% of current market capitalization)
  4. The company has raised operating cash flow by approximately 150% over the past three years and sells for a reasonable 11.6 forward earnings.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in PAAS over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.