2 Silver Stocks That Could Explode

Silver has crashed nearly 50% from its January peak, falling from around $120 an ounce to just $60. Most investors are running for the exits. But we're doing the opposite. We're bullish on 2 silver mining stocks that we believe could explode when silver rebounds.

Here's why. Silver miners can deliver several times the profit growth of the metal itself when prices rise, because almost everything a miner earns above its cost to pull the metal out is pure profit. And we've found 2 that stand out from the pack. One just grew earnings 160%. The other is growing fast while trading at less than a third of the broader market's growth-adjusted valuation.

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We'll show you both tickers, why we like them right now, and the risks you need to know before buying. 

Plus, we've got a bonus precious-metals stock that actually ranks higher than both. And we're saving that one for last.

1- Buenaventura (BVN)

We'll start with Buenaventura (BVN), Peru's largest precious-metals miner, with more than 70 years behind it. Silver sits at the heart of the story through an operation that keeps getting better. Output there climbed 8% last quarter, and this summer Peru approved a 20% increase in how much ore the company can pull each day, so there's more silver on the way.

There's more than silver here, though. A brand-new gold mine called San Gabriel started selling its first gold this year and is still ramping toward full output, adding a second growth engine. And Buenaventura owns nearly a fifth of one of the largest copper mines in Peru, a passive stake that quietly sent it close to $120 million in dividends.

Silver, gold and copper on one ticker, and that mix pushed revenue up 43% last quarter and drove earnings up about 160% from a year ago.

Here's something you don't see every day. Only 2 analysts cover Buenaventura, but both of them rank in the top 7% of all analysts on Wall Street. 1 of those analysts has a fair value target pointing to more than 20% upside from here. As you'd expect on a list of under-the-radar miners, Wall Street simply hasn't shown up here in numbers yet, and that's the kind of coverage gap we like to get ahead of.

Now let's pop the hood with our Zen Ratings. Our quant model analyzes every stock across 115 different fundamental, technical and AI factors, then boils it down to an intuitive letter grade, A through F. It also gives 7 underlying Component Grades, encompassing things like Value, Growth and Momentum, that pin down each stock's strengths and weaknesses.

Buenaventura earns an overall B, a Buy recommendation, and it has actually firmed up since this was drafted, now in the top 14% of more than 4,600 stocks. Two Component Grades lead the way, Financial strength in the top 13%, and the standout, Value, all the way up in the top 3%, based on 21 value measures. One thing to keep in mind is that Growth grades weak here, in the bottom 29% of the market, so this is more of a value story than a growth story.

All in all, Buenaventura gives you silver with a gold and copper kicker, a 70-year track record, and a value grade cheaper than almost every stock out there. 

And if that's the quiet, diversified pick, the next one is the opposite, our highest-rated silver miner…

2- Fortuna Mining (FSM)

Our highest-rated silver miner is Fortuna Mining (FSM). Until recently it was literally named Fortuna Silver, and silver is still in the mix through its Caylloma mine, high in the Peruvian Andes. But what's turned Fortuna into a standout is gold. Its biggest operation sits in West Africa, and it runs a second gold mine, down in Argentina. So you're getting Fortuna's silver roots with a fast-growing gold engine bolted on top, and with gold sitting up near record highs, that engine is throwing off serious cash.

The catalyst to watch is that West African project, already one of the lower-cost gold mines in the business. Back in late July, Fortuna greenlit an expansion there, and here's the part we like, it's paying for the entire build-out out of its own pocket, no new debt, targeting more than 200,000 ounces of gold a year for the next decade. And even while it funds that growth, Fortuna has been steadily buying back its own shares, which tells you how cheap management thinks the stock is.

All of that is already showing up in the numbers. Revenue grew more than 45% last year, which is more than decent, but below the industry average, while earnings grew by 141%, significantly ahead of the industry average.

And you're buying it cheap. Fortuna trades at a PEG of just 0.48, less than a third of the market's 1.5, so all that gold-driven growth comes at a steep discount to the average stock.

What our system has to say is what edges Fortuna ahead of Buenaventura. It earns an overall B, a Buy recommendation, in the top 12% of everything we track. Let's take a look at those Component Grades. Growth in the top 30%, Financial strength, an elite top 4%, and the standout, Value, in the top 3%, based on 21 value measures. The one soft spot is Sentiment, which grades an F, in the bottom 4% of the market, so the Smart Money crowd has stayed on the sidelines so far.

The one knock is jurisdiction. Fortuna's growth runs through West Africa and Latin America, where politics and permitting can get bumpy. But it's funding that growth out of its own pocket instead of with debt, which is how you want a miner carrying that kind of risk.

All in all, Fortuna hands you a silver mine, a self-funded gold engine, record-high gold prices at its back, and the strongest Financial strength grade on this list alongside a top-tier Value grade, a financially rock-solid miner priced like a bargain. On the fundamentals, it's the pick of the litter. But we saved the single highest-rated name on the whole list for last.

This is sort of a bonus pick, because it isn't as directly tied to silver as the other pure-play picks we've covered. But it's related for sure. So if you're interested in this overall theme, its fundamentals make it well worth a space on your watchlist.

If you want to stay one step ahead of the market, join our Live training every Monday, where we share an updated market outlook and trading plan to outperform, plus a Trade of the Week based on our proven Zen Ratings quant model. It's a free event, but you do need to register at wallstreetzen.com/live. And even if you can't join live, it's still worth signing up, since a replay goes out to all registrants to watch whenever is convenient.

3- Sibanye-Stillwater (SBSW)

And now the bonus pick, the one we saved for last, Sibanye-Stillwater (SBSW). It isn't a silver miner. It's one of the world's biggest producers of platinum and palladium, plus a major gold miner, across South Africa and Montana.

So why is it on a silver list? Because platinum is silver's closest cousin, both are precious metals that double as industrial workhorses, and when money rotates back into the complex, they tend to run together. When silver moves, this usually moves with it.

In its latest half-year report, earnings more than tripled from a year ago, with revenue hitting a record on top. It cut net debt in half, brought back its dividend, and settled a long-running legal dispute that had been hanging over the stock. On top of the mines, it runs a fast-growing metals-recycling arm that adds another income stream.

Here's the kicker. Even with all that good news, Sibanye still trades more than 50% below its 52-week high. A turnaround that's already working, on sale.

As you'd expect for an overseas miner, coverage is thin, just 3 analysts. But as of this writing, every one of their fair value targets sits above today's price, implying anywhere from about 20% to 50% upside in the year ahead.

And it will shock no one that our highest-rated pick carries our highest grade. Sibanye earns an overall A, a Strong Buy recommendation, the most elite rating our model hands out, and it has actually strengthened since this was drafted, now putting it in the top 1% of more than 4,600 stocks. That's better than 99% of everything we rate. Let's pop the hood and see what's underneath. Financial strength, top 9%. Growth, top 6%, which foreshadows more earnings beats ahead, and together, Growth and Financial strength are the 2 most vital grades for future outperformance. Then the crown jewel, Value, in the top 1%, absolutely elite.

The one risk is volatility, plain and simple. Platinum, palladium and gold can all swing hard, and these shares swing with them. But with record first-half results and net debt cut in half, Sibanye is in its strongest shape in years, a rare mix of dirt cheap and firing on its two most important grades.

So there's the finale, a top 1% stock, the cheapest Value grade on the whole list, and the one name here most likely to catch an updraft the moment the precious-metals trade heats back up. Consider whether it deserves a spot in your portfolio.

Don't think of these as 3 random tickers. Think of them as a little precious-metals basket. Buenaventura and Fortuna give you silver exposure, each one backed by gold. And Sibanye gives you the sympathy play, rated near the very top of our whole universe.

Here's the thread that ties it together. Silver has pulled back roughly 50% from its January record, yet these miners are still throwing off strong profits at today's prices. That's a high floor under these shares, and a setup we like a whole lot more than buying silver when it sat at the top.

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