Small-Cap Silver Stocks are Undervalued Right Now, and Trading at Discounts to Their Cash Values

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As a precious metal used for various industrial applications, silver is unique. Not only is it an excellent thermal and electrical conductor, but it also shares many investment characteristics with gold. For example, silver is a safe haven metal for investors because, like gold, it can help protect investors in times of economic turbulence and inflation.

Right now, silver stocks are undervalued and underperforming the market even though silver is an essential metal when it comes to the shift to green energy and the environmental goals that governments are desperate to achieve. This inevitable demand is set to boost silver prices and with it small-cap silver mining stocks.

Value investors are always looking for the right assets at the right moment. Small cap silver mining stocks may offer the most upside in the current market for the coming quarters, based on heavily discounted prices (compared to cash value), and good historical price momentum.

Some of the small-cap silver stocks with a discounted price with high growth and great momentum are:

  • Fortuna Silver Mines Inc.: A Canadian-based mining company focused on silver mining in Latin America and West Africa. In 2021 the company reported a 98.5% year-over-year net income decline in sales which doubled by the third quarter of 2021.
  • Silvercorp Metals Inc.: A mining company engaged in the acquisition, exploration and development of mineral properties in China. The company sequentially reported increases in silver, gold, lead, and zinc production.
  • Pan American Silver Corp.: A Canadian-based mining company focused on the production of silver, gold, zinc, lead and copper. The company’s mining activities also include exploration, extraction, processing, refining and recovery.

Companies that focus on the acquisition, exploration and production of silver generally also mine other precious metals such as zinc, copper and gold, so their revenues come from a very small percentage of silver.

Silver is a key precious metal for the energy transition due to its use in the fast-growing solar power and electric car industries. That is why the demand for silver will be steadily growing from now and for the next few years which will drive its price upwards.

Silver and silver mining stocks have also remained in the shadow of the developing copper and gold stories for the past few years. The hype around the other precious metal and red metal used in batteries has meant that silver has yet to have its time in the sun.

This has left significant blue-sky potential on the table for silver mining stocks as it holds valuable land packages and is well-capitalized for its drill programs.

The investment case for silver goes far beyond speculation and is built on the foundations of strong mining industry and stable, upward-trajectory pricing.

Silver plays an important role in industrial demand and therefore in the economy, making silver mining stocks undervalued at the moment a great business opportunity with growth ahead for the coming quarters and years.

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