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SSRI, HL, PAAS, CDE, EXK, MVG, Silver Mining Stocks Overvalued

^{Published on 2011-04-12 04:41:07 - WOPRAI}
 

April 12, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Silver Mining sector and these stocks are the most undervalued as of today. SILVER STANDARD RESOURCES (NASDAQ:SSRI), HECLA MINING CO (NYSE:HL), PAN AMERICAN SILVER CORP (NASDAQ:PAAS), COEUR D'ALENE MINES CORP (NYSE:CDE), ENDEAVOUR SILVER CORP (NYSE:EXK), MAG SILVER CORP (AMEX:MVG) are all expected to go Down as they are Overvalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.

The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:

     Symbol     Company Name                        Last Close     Fair Value     Valuation                   Industry               
     SSRI       SILVER STANDARD RESOURCES           34.01          23.97          20.70% Overvalued           Silver Mining          
     HL         HECLA MINING CO                     9.13           8.02           20.70% Overvalued           Silver Mining          
     PAAS       PAN AMERICAN SILVER CORP            40.95          34.61          20.70% Overvalued           Silver Mining          
     CDE        COEUR D'ALENE MINES CORP            35.58          32.81          20.70% Overvalued           Silver Mining          
     EXK        ENDEAVOUR SILVER CORP               11.4           7.26           20.70% Overvalued           Silver Mining          
     MVG        MAG SILVER CORP                     13.56          7.52           20.70% Overvalued           Silver Mining          

Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.

Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.

SILVER STANDARD RESOURCES (NASDAQ:SSRI) - Silver Standard Resources Inc. engages in the exploration, development, and production of mineral resource properties in Argentina, Australia, Canada, Chile, Mexico, Peru, and the United States. The company primarily explores for silver, gold, tin, zinc, lead, and copper deposits. Its principal projects include Pirquitas project located in the Province of Jujuy, Argentina; San Luis project in central Peru; Pitarrilla and San Agustin projects in Durango State, Mexico; and Diablillos project in Salta Province, Argentina. The company was formerly known as Consolidated Silver Standard Mines Limited and changed its name to Silver Standard Resources Inc. in April 1990. Silver Standard Resources Inc. was founded in 1946 and is headquartered in Vancouver, Canada.

HECLA MINING CO (NYSE:HL) - Hecla Mining Company engages in the discovery, acquisition, development, production, and marketing of silver, gold, lead, and zinc. It owns a 100% interest in the Lucky Friday unit located in northern Idaho; and a 100% interest in the Greens Creek unit located on Admiralty Island, near Juneau, Alaska. The company produces and sells lead, zinc, and bulk concentrates to custom smelters on contract; and unrefined silver and gold bullion bars to precious metals traders. Hecla Mining Company was founded in 1891 and is headquartered in Coeur dAlene, Idaho.

PAN AMERICAN SILVER CORP (NASDAQ:PAAS) - Pan American Silver Corp., together with its subsidiaries, engages in the exploration, development, extraction, processing, refining, reclamation, operation, and production of silver producing properties and assets. It also produces and sells gold, zinc, lead, and copper minerals. As of March 23, 2009, the company had eight mining operations in Mexico, Peru, Argentina, and Bolivia. Pan American Silver Corp. was founded in 1979 and is headquartered in Vancouver, Canada.

COEUR D'ALENE MINES CORP (NYSE:CDE) - Coeur dAlene Mines Corporation, together with its subsidiaries, engages in the operation, ownership, exploration, development, and mining of silver and gold properties in South America, Mexico, the United States, and Australia. It also explores for lead and zinc ores. The company was founded in 1928 and is based in Coeur dAlene, Idaho.

ENDEAVOUR SILVER CORP (NYSE:EXK) - Endeavour Silver Corp., together with its subsidiaries, engages in the evaluation, acquisition, exploration, development, and exploitation of mineral properties, primarily silver in Mexico. It produces silver and gold from its underground mines at the Guanacevi mines project located in the state of Durango; and the Guanajuato mines project located in the state of Guanajuato. The company was formerly known as Endeavour Gold Corp. and changed its name to Endeavour Silver Corp. in September 2004. Endeavour Silver Corp. was founded in 1981 and is based in Vancouver, Canada.

MAG SILVER CORP (AMEX:MVG) - MAG Silver Corp. engages in the acquisition, exploration, and development of mineral properties in the Mexican Silver Belt. It primarily holds 44% joint venture interest in the Juanicipio property; and 100% interests in Cinco de Mayo property and the Lagartos (NW and SE) property. The company was formerly known as Mega Capital Investments Inc. and changed its name to MAG Silver Corp. in April 2003. MAG Silver was incorporated in 1999 and is headquartered in Vancouver, Canada.

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