Surging silver miners pushing valuation limits, CIBC says

|By:, SA News Editor

Silver miners have soared YTD, far outgaining the metal's modest ~10% rise so far and even rising more than gold miners, and CIBC analysts say the shares appear to be "pushing valuation limits."

While some of the strength in silver equities may have come from expectations that silver will outperform gold after underperforming YTD, the firm is not convinced this actually will happen as it sees potentially disappointing industrial demand for silver; investment demand would need to rise significantly to keep the market from moving into a material surplus in 2014 and after.

Among individual silver mining stocks, the firm downgrades Fortuna Silver Mines (FSM) to Sector Perform from Sector Outperform but raises Pan Am Silver (PAAS) to Sector Perform from Sector Underperform, noting PAAS' strong organic growth potential and its progress in cutting costs and boosting cash flow.

ETFs: SLV, AGQ, SIL, SIVR, USLV, ZSL, DSLV, SLVP, DBS, SLVO, SILJ, USV