Why Silver Stocks are Hot Now

Commodity Online reported that higher silver prices and increased production have made silver stocks a lucrative investment.

The market news is quoted as saying:

Among the key stocks to watch for according to analysts are Coeur D’Alene (NYSE: CDE), First Majestic Silver (NYSE: AG), Silver Wheaton (SLW), Pan American Silver (PAAS), Silver Standard Resources (SSRI),Hecla Mining and Silver Corp. Coeur earned $58 million, or 65 cents a share, in the second quarter, up 230% from last year.

NEW YORK (Commodity Online): Silver stocks have gained investor interest in recent times as silver prices have doubled more than a year ago, helping major mining companies in the sector to report better financials.

Most silver miners are ramping up production to take advantage of the precious metal rally.

"Right now, silver producers as a group are making better margins than Gold producers as a group," according to Adam Graf, analyst with Dahlman Rose & Co quoted in Investors.com.

Among the key stocks to watch for according to analysts are Coeur D'Alene (NYSE: CDE), First Majestic Silver (NYSE: AG), Silver Wheaton (SLW), Pan American Silver (PAAS), Silver Standard Resources (SSRI),Hecla Mining and Silver Corp. Coeur earned $58 million, or 65 cents a share, in the second quarter, up 230% from last year.

Silver Wheaton (SLW) has a sound business plan, capable management, significant earning capacity and solid debt management, according to Bryce Till in Seeking Alpha.

"SLW’s three-year average pretax profit margin is slightly above 31% a great ratio which is higher than the industry average. What is even more impressive about SLW’s cash generation is its free cash flow as a percent of sales. Last year this ratio was above 43%!"

Pan American Silver (PAAS) sports a paltry debt-to-equity of 2.2%. That's much lower than that of other mining plays such as BHP (27.5%), Coeur d'Alene (NYSE: CDE ) (9.1%), and Vale (NYSE: VALE ) (32%).

Silver Standard Resources (SSRI) is riskiest of silver stocks according to Adam Graf of Rose & Co. "It has only one mine in operation, but it has the largest pipeline. Up to five potential new mines in Latin America could open between 2012 and 2015."

Most silver stocks have weakened in recent weeks with Coeur D'Alene falling from a high of $30.08 to $28.26, First majestic silver declinging from a high of $24.38 to $20.52, Silver Standard Resources falling from a high of $30.94 to $26.02 and Silver Wheaton falling from a recent high of $40.71 to $38.50.