Investment Recommendation : Silver Wheaton (Ticker Symbol SLW)

Silver Wheaton generates revenue from the sale of silver. It has 17 purchasing agreements through which it acquires silver production from the counterparties. Just to clarify, the company does not take part in any mining, it simply enters into purchasing agreements with mining companies for a fixed price. Their purchasing price is around $5.80/oz of silver and the market price is around $17/oz so that gives you an idea of what sort of margins they have. If the price of silver goes up, their margins will increase (obviously). But here is the key – the contractual price to purchase is subject to a MAXIMUM increase of only 1% per year so no matter how high the price of silver goes, their purchasing price will remain low. The company’s market cap is over $5 billion but they only employ 23 people because that’s all they need. They are based in Canada but somehow got the company registered in the Cayman Islands and therefore pay NO income taxes. The price of silver is expected to increase as demand is very high. China actually has a ban on silver exports due to high demand and low supply. The price of silver will likely increase in the coming months and SLW is poised to be a huge beneficiary. BUY BUY BUY.