The great silver melt-up of summer 2025 is ongoing and could take the precious metal to even greater heights before the fourth quarter hits. Indeed, it’s tough to justify getting into silver ETFs (Exchange Traded Funds) or bullion after such a sudden surge. And while it’s hard to tell what the next move in the price of silver will be, I do think that some of the miner stocks are deserving of more love from investors. After all, they do stand to benefit from the recent rally in silver and don’t seem to have priced in the recent momentum, which could persist through the year’s end.
So, if you’re ready to look beyond gold, perhaps it’s time to consider the broad basket of silver mining plays which, I think, have greater upside potential and far more in the way of value than those silver coins and bars!
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It’s been a majestic 2025 for silver and its miners. Can the gains continue?
First Majestic Silver (TSX:AG), one of the premier miners, has been heating up of late, now up 38% year to date, beating the gains posted by the TSX Index and S&P 500. Despite the recent strength, shares of the miner are still beaten down and well off their highs last seen in the early innings of 2021. Will the latest silver surge help stage a run back to prior highs? It’s too early to tell. If silver can remain elevated for longer, I believe that several forces are at work that could help propel AG stock from these levels.
Looking ahead, the company could make the most of its high-grade mines as it ramps up production. Furthermore, the firm has exceptional management and no shortage of bullish analysts who think shares could be in for a solid next year of returns. With a strong first and second quarter of results in the books, First Majestic is upbeat about what could be a “transformational 2025.” Of course, the firm needs to continue firing on all cylinders as silver prices do their thing.
AG stock looks way too cheap
Today, shares of First Majestic go for 4.2 times price-to-sales (P/S) and 1.8 times price-to-book (P/B). With a trove of high-grade mines and the ability to make the most of the 2025 silver surge, I certainly wouldn’t sleep on the name, especially if you’re looking for a cheap way to catch up to the recent rally in silver.
Of course, as is the case with many mining stocks, you’re going to have to deal with more volatility than is experienced by the broader indices. With a 1.2 beta, AG stock is more correlated to the TSX Index. But for a miner, it’s certainly not the choppiest ride out there, making it a suitable addition for Canadian investors seeking greater diversification, dividend growth, and a way to gain from continued strength in silver (and gold).
So, is AG stock a buy going into August? I’d say it’s a great value right here. Despite the hot start to the year, I think its rally is underappreciated, with stronger legs than the price of silver itself. In short, First Majestic is a good buy, and better than bullion itself.
