Canadian investors continue to look for a deal on the TSX today, and yet that’s becoming a lot harder to achieve — especially considering the TSX today has recently passed all-time highs. Yet there are certainly a few winners to consider. In fact, today we’re going to dig right into one I would pick up with no hesitation and hold forever.
Pan American Silver
Mining stocks have been a huge hit lately. However that’s left many investors perhaps fearful they’ve already missed out on the growth. Yet I would argue that now is the best opportunity — especially for a company such as Pan American Silver (TSX:PAAS).
PAAS stock is one of the world’s largest primary silver producers. It holds a diversified portfolio of assets located in Mexico, Peru, Bolivia, and Argentina. The company also produces and sells gold, zinc, lead, and copper. Pan American Silver operates several mines and development projects, and it has a history of consistent production and exploration activities in the precious metals sector.
In fact, despite missing earnings estimates over the last few quarters, shares of PAAS stock have surged in share price since reporting its recent earnings. So, let’s look at what’s been happening and if momentum is underway.
Quarterly performance
Investors may look at an earnings report and see the year-over-year results and believe that’s the important point to focus on. However, I would argue that quarterly reports are far more important. This can demonstrate momentum for a company, including for a company like PAAS stock.
In that case, the company did have lower momentum in the last few quarters. The second quarter produced 6.02 million ounces of silver and a record 248.2 thousand ounces of gold, with revenue of $639.9 million. In the third quarter, production shrunk slightly to 5.7 million ounces of silver and 244.2 thousand of gold, with revenue of $616.3 million. By the fourth quarter, it reached 4.8 million in silver and 267.8 thousand in gold, with a record $669.3 million in revenue.
Why did shares rise?
In short, shares rose because of the outlook and the price of silver and gold. PAAS stock did see their results fall below estimates. However, shares climbed as the company reported a solid guidance outlook for 2024. In fact, it’s so confident in its future that the company reported a buyback program.
PAAS stock announced it will purchase up to 18,232,990 of its common shares, up to 5% of its issued and outstanding shares. Meanwhile, it sees its bottom line improving as well as its production — especially with silver and gold in such high demand.
Silver production should achieve between 14.9 to 16.1 million ounces, with a goal between 95 and 117 thousand ounces. However, this should soon increase as the company announced additional high-grade drill results from its La Colorada Skarn project. The company expects an update sometime in the summer.
Bottom line
The future looks bright for PAAS stock, even shiny, with more demand and more production underway. After a year of struggling, the company has made solid moves towards bringing down losses and increasing production. So, with shares down 48% from all-time highs and a 2.2% dividend yield, it’s a drool-worthy stock for investors.
