Luke Burgess, who I don’t believe I’ve written about in the past couple years, is pitching his Hard Money Millionaire advisory by saying he’s found the next Silver Standard Resources (SSRI).
He starts out by essentially saying that he’s following the big money — he noticed which institutions were heavily invested in SSRI, which saw massive returns, and saw some of those same institutions buying heavily into his new favorite silver stock.
“The same group of investors who made this company [SSRI] what it is today. . . is doing it again.
“Only this time, the stakes are higher — and the rewards are even bigger.
“No doubt you’ve heard of some of them. . .
“They’re Among the World’s Most Powerful Institutions. . .
“Barclays: The #1 institutional investment firm in the world, with $1.7 trillion under management.
“Goldman Sachs: The world’s 3rd-biggest money market manager, with $735 billion in assets.
“JPMorgan Chase: The second-largest U.S. bank, with holdings exceeding $1.17 trillion.
UBS: Europe’s leading wealth manager.”
And they dot the i’s and cross the t’s …
“Make no mistake: they’re a veritable “Investment Dream Team.”
“By making the same moves they do, investors like you are almost guaranteed to win.
“And that’s exactly what a group of savvy individuals did when they followed this group into Silver Standard Resources.
“Backed by the biggest names in finance, those who got in early walked away with gains topping 7,600%!
“So when I discovered these very same multi-national investment banks and wealth managers gobbling up shares of a similar silver mining stock. . .
“I knew something huge was about to happen.
“And it was high time I alerted my readers. . .
“This Investment Dream Team Is about To. . . Blow It Out of the Water a Second Time”
OK … so those massive institutions were all listed as shareholders of Silver Standard Resources at one time or another. We get it. We should note, to be fair, that if you look on the list of institutional owners or buyers of almost any stock of any size, you’ll see at least half of those names and many others that sound just as impressive.
Our focus today is on the next great silver stock — not Silver Standard Resources, which incidentally was one of the top performing teaser picks that I wrote about late last year (that was for an Oxford Club tease, they touted it around $8 and it’s now in the $20s), but the one that Luke Burgess now expects to blow the doors off the joint in the near future.
Burgess, like many other analysts and editors, starts with the assumption that silver will spike — not a bad assumption, since he’s already right to some degree (from the hints and other info in the ad I’m assuming that he wrote it when silver was around $13-14 an ounce, one of the risks of the time it takes some of these guys to get their ads released … it’s already over $17 an ounce and rapidly outpacing gold’s rise in recent months).
He tells us that he expects silver to spike to over $18 an ounce, which is not particularly aggressive at this point, and he pulls out the other numbers that we often see of $50 and $100 an ounce for silver.
“When the price of silver begins its parabolic spike, the small silver company I’m talking about could take off on an epic run. . . for two simple reasons:
“It’s backed by a litany of the world’s most powerful institutions.
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just click here...“It’s projected to increase silver production by over 66% this year.
“Rest assured, once CNBC gets hold of the story, buying shares at this discount rate will be out of the question.
“And that’s why I want to extend you a special invitation.”
And the special invitation? It is, of course, to become one of the limited few who subscribe to his Hard Money Millionaire newsletter. In return, he’ll tell you all about his favorite silver company … and I’m sure he’ll send lots of other info your way, but if you just want to know about that silver company you’re in the right place.
Your friendly neighborhood Stock Gumshoe, of course, never limits the number of subscribers, and I can figure out who this company is from a few clues provided … and of course, it won’t cost you $495, the next few paragraphs will come your way for the limited-time discount price of zilch.
So how about those clues?
Here’s a big clump of them:
“My New Silver Play Could Return an Instant 33%. . . And Over 450% in the Next 18-24 Months Here’s why. . .
“In my years of research, investigation, and travel to corners of the world most will never even hear about — to see these operations for myself. . .
“I haven’t come across a better-founded outfit than this one.
“This small company combines a stable established base with some of the most exciting prospects in the business.
“It already has six silver-producing mines — all in geopolitically-safe mining-friendly countries.
“The company expects to continue ramping up production this year 66.7% to 20 million ounces — a $300,000,000 value at today’s prices.
“Now here’s the kicker. . .
“This company has a $1.1 billion market cap. And the 20 million ounces it will produce this year will be enough to jam double- and triple-digit gains into investors’ pockets.
“Not only that, but they’ve just increased their quarterly operating cash flow by over 650% to $16.8 million.
“And their latest projections indicate that by the end of 2009, the company expects operating cash flow to exceed $100 million. . .
“That’s a 762% increase over last year — and a 183-fold increase in overall production!
“No, I didn’t miss a decimal point. . . 183-fold. Or put more precisely —
“A Projected 18,339% Rise in Output Across all of their Properties over the Next Year!
“And if you think that’s amazing, consider this. . .
“The stock price has yet to react to this newly-released data.”
Well, I haven’t seen this ad running before today … but based on the prices he gave for the company, that 33% instant return has already happened, thanks to the spike in silver prices and a bit more awareness about this company’s ramp-up in production. The company? The mighty, mighty Thinkolator tells me that this is …
Coeur d’Alene Mines (CDE)
CDE is one of the world’s major primary silver miners (primary meaning they focus on looking for and mining silver, they don’t produce it, as many major miners do, as a byproduct in gold, copper, zinc, etc. mines). They do have 6 mines across North and South America, all focused on silver (with some gold), plus a potential gold mine in Alaska (Kensington) that they hope to start development on next year.
The reason for the large increase in silver production is that they’re getting their first full year of production from “the world’s largest pure silver mine” (their words, I didn’t check), San Bartolome in Bolivia, and starting up production at a big mine in Mexico.
And yes, they did book $16.8 million in operating cash flow last quarter (reported in August), and they do expect 20 million ounces of production this year, which is a 66.7% increase over last year. I did not check the institutional holdings and changes to make sure that those matched up, but it seems extremely unlikely, if not impossible, that those exact matches would apply to another big silver miner.
Now the bad part: They don’t have a $1.1 billion market cap anymore … thanks to a $6 jump in the share price over the last few weeks of silver near-frenzy it’s now about $1.6 billion, with a share price over $21 and still climbing as I type. So if that’s what you were relying on for the quick 33% return, it’s already happened.
Of course, I don’t know if the stock price is reacting to their performance, as Luke expected to happen, or if it’s just bouncing them higher along with silver — all the silver names are up sharply in recent months, but it does look like investors are favoring these guys: Coeur d’Alene is outperforming most of them, it’s moving higher and faster than Pan American Silver (PAAS), Silver Wheaton (SLW), or Silver Standard Resources (SSRI).
Does that mean it will continue moving higher? Good question.
No, I don’t have the answer.
Sorry.
If we assume that the analysts are right, then CDE looks like a good bet compared to SSRI, PAAS and SLW based just on earnings, all those companies are expected to grow significantly in 2010 thanks to new production and rising silver prices, but Coeur d’Alene is trading at a forward PE of about 17 compared to 20+ for the other names, so perhaps there’s still a touch of “undervalued” in CDE if you think gold and silver will continue to perform well.
If you think silver and gold will go up, I’m fairly confident CDE will rise, too — they produce a significant amount of gold at a couple of their mines, and the Kensington gold mine is potentially very large if permitting goes through without a problem (it was tied up in court — going to the Supreme Court — until recently, but appears to be restarting now).
If you just want silver leverage without as much operational risk you might take a look at Silver Wheaton (they’re more akin to a royalty play on silver, with more predictable costs, though they’re also relying fairly heavily on a couple big mines), but if you want something a little bit cheaper, with perhaps more potential for a sharper move, CDE, SSRI and PAAS are probably all reasonable bets on a silver spike, and though I haven’t looked very closely at Coeur d’Alene before it does look like it may be worth some more attention.
And of course, CDE has already had a massive, massive run not just in recent weeks but over the past year — that already brought one analyst downgrade this week, citing the fact that they’re now more fairly valued after their price rise, but the share dip on that downgrade didn’t last long in the face of climbing silver prices.
I know there are a good number of silver bugs out there in Gumshoe Land, and I know that a lot of folks have talked about owning CDE both in comments here and in the forum, so if you’ve got a favorite for us, or some more insight on Coeur d’Alene or any of the other major silver names, I’m sure we’d all be delighted to hear about it — toss your fuel on the fire with a comment below.
Full disclosure: I own long term call options on both Silver Wheaton and Pan American Silver, and also own some silver bullion. I am not invested in anything else written about above and will not trade in any stock mentioned for at least three days.
Who didn’t know this? Thanks Travis.
Just sold off CDE.Even though the analysts predict a continued rise in earnings ,production,& share price;one cannot but be concerned about a major property in Bolivia? Bolivia’s leaders are in love with Hugo Chavez.Can you spell Nationalization?
I have owned CDE several times over the years and bought some late last year at .41 which would now after the reverse split be $4.10 and have enjoyed the ride, but I’m concerned it might be a little ahead of itself at present. There is a gap at 17.5 which would be a more reasonable entry. My target from last year was $2.50 now $25.
Travis
A big part of that run in price was a 10 for 1 reverse split this year.
http://finance.yahoo.com/q/ta?s=CDE&t=1y&l=on&z=m&q=l&p=m50,m200&a=m26-12-9&c=
Yeppers, that 10 for 1 reverse split worked for a change, & this analyst is 100& late with this call, what is he charging/yr. Travis?
My old buddy, Paul Sarnoff, made a bloody fortune in CDE options in the ’80’s, (he sat in the office next to me at P/W) so were he alive today, “The Silver Bull” would’ve gotten his people in $10. or more ago.
FYI, new CDE article just came out today on MineWeb:
http://mineweb.co.za/mineweb/view/mineweb/en/page32?oid=89294&sn=Detail
I SOLD 200 SHARES OF CDE LAST WEEK FOR
$20.33, MY COST WAS ABOUT $11.25; I HAVE BEEN IN AND OUT OF THIS STOCK FOR ABOUT ONE YEAR. I STILL OWN A NICE AMOUNT THAT I AM HOLDING ON TOO!
ANOTHER GREAT STOCK IS CLNE, I ALSO MADE GOOD MONEY AND AM HOLDING IT.
its a probably a little late for this go, but to me the best way to play silver is AGQ if the govt does not screw it up like they did DXO. i never have made a buck on these mining stocks, too many risks and varibles.
I purchased ONLY 100 SHS. CDE– at .93, on the same day I purchased 1,000 shs. of another stock that went from $1.10 to .09 == same day. Oh, what if, what if, what if —————-
CDE’s production costs are higher than several other producers. The lowest cost producer by far is Chinese-based SVM, followed by Silver Wheaton, then Hecla, then Pan American Silver. All under $6 an oz. CDE, the last I checked, had costs per oz. over $6.
On 12/24/07, I bought 100 CDE @ $4.48/sh. The reverse split gave me 10, and I am still down over 50%. It would have to more than double at today’s trade for me to break even. Oh, well~! I’ll still hold,,, and pray~! OR, maybe now would be a decent time to increase my holdings???
EYoung
Puhleeze, Travis, don’t keep writing “Couer”. It grates on the mind like fingernails on a blackboard. Try “Coeur.” I guess you did not major in French.
Bon appetit,
P. Hanke
Travis should have given me credit for this one, but then maybe a dozen other people also send in this teaser offering a solution.
I made my first buy of CDE in March 08 @.4.96 more in Apr.@$3.89, and then subsequent buys in Aug. @$2.60 and @.89 in Oct. selling COVERED CALLS against my holding 3 times to reduce my dollar average cost even further.
I made my final buy in June 09 AFTER the reverse split @15.07 (for comparison $1.57) so am sitting on some nice profit, but I consider this one a long term hold and would only buy more on a pullback below $20.
I obviously agree that Burgess is quite LATE on this call There are other lower priced silver miners with just as great a potential run and I hold at least a dozen of them.
You skeptics on precious metals will not be convinced until most of the money has already been made. I am up 115% so far this year with over $20,000. profit in the past 6 weeks. When your paper becomes worthless you will wish you had some REAL MONEY instead of the Federal Reserve Notes (or holdings denominated in them) that have lost 97% of their purchasing power since the Federal (which it isn’t) Reserve was established in 1913!
Read “The Creature from Jekyl Island” by Griffen to get a true perspective on what is happening to our economic foundation.
Anyone have any info on the silver plugs?
Anyone have any info on the silver plugs?Sorry meant shots.
Sorry meant silver shots.
When everybody “knows” something in the competitive market, it may not be so valuable. In this case, everyone “knows” inflation is around the corner, gold and silver are in short supply relative to Federal Reserve Note Treasury Debts and silver is supposed to be a better deal than gold percentage-wise. People “know” gold and silver exchanges and ETFs have naked shorts they cannot hope to deliver for physicals. They may default and have to deliver them in cash if gold and silver prices do not fall. This is not bullish for gold and silver no matter what herdthink says.
Last fall we buy-stop trailed CDE down into the swoon to all-time and made money with trailing sell stops. This was despite a CDE investor relations department and son-in-law CEO of a previous CEO and officers who were totally non-responsive to serious repeated public questions about Bolivia risk, reverse split and repeated broken CDE promises on mining targets.
CDE conference calls were shams, with nothing of substance discussed by either the company or the institutional analysts who funded CDE.
CDE finally released a little public info on OPIC coverage on Bolivia, but not the necessary details or limits. Altogether a CDE corporate governance rating near zero, dedicated to awarding stock options to insiders at 48 cents and up and warrants to underwriters with similar low-priced advantages.
When we see $495 bogus hype reports like LB HMM, recommending CDE near 22 after it was 36 cents last November, at a PE ratio above 67, we go the other way. We like to buy low and sell high.
Gold and silver are both up four times after the dollar fell 83% versus gold and silver. Gold and silver so far peaked in March 2008 at 1033 and 21.44. We do not view gold and silver as a bug or religious cult.
Re inflation hype, we had a 15.3% collapse in GDP last year and watched unemployment in honest shadowstats.com terms hit 22%, with money and credit collapsing over 12%, durable good import production prices falling 33% year over year and house and car prices and sales at generational lows and not turning around anytime soon despite Fed, Treasury mass media propaganda about green shoots. Where exactly is the inflation?
Banks are not lending, credit cards, equity lines and shadow banks are collapsing. We are not on the Constitutional
(Article I Section 10) gold and silver standard, most people do not have savings, so the President and Fed cannot inflate 69% like they did in 1934 changing the price of gold from $20.67 an ounce to $35 overnight. (Derivative leveraged gold is still officially priced at $42 an ounce and may see that price again in cash free markets, based on Sir John Templeton observing assets correct the amount they are financed – woe 125% DiTech loans top value.)
In fact, despite announced IMF PR puff gold sales which go to China, now the leading gold producer, Central Banks have had to buy gold to support its price in their fight against overwhelming deflationary defaults. When surplus trade nations are done buying gold which is dwarfed by deflating dollars, look out below. Government owned banks are losing the inflation battle which worked for two generations, a Jubilee. The scarce dollar may have more upside now than gold and silver. When we consider Big4 Insiders are two times short gold and four times short silver, this is not a bullish (or popular) outlook for either. We never made much money following the madness of crowds.
JubileeProsperity.com
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3251493
what is basically the best way to play the silver game without buying options?
I was out at San Simeon CA a few years ago at the William Randolph Hearst Castle, Museum and Gift Shoppe. Here’s a guy that had his ducks in a row. Daddy buys a silver mine, hits a major gold vein, drops dead and leaves junior the cash. Now, that’s investing.
Has anyone heard of this apparent trading ad? It comes from the League of Power and is titled "The API-50 Government Windfall". I sure would like to know what this is.