The Globe and Mail reports in its Tuesday, Sept. 15, edition that Canaccord Genuity analyst Dalton Baretto says investors seeking leverage to the price of silver might want to consider Silvercorp Metals, which he rates "hold" in new coverage. The Globe's David Leeder writes in the Eye On Equities column that Mr. Baretto targets the shares at $12. Analysts on average target the shares at $10.50. Mr. Baretto says in a note: "Our estimates indicate that the company does not currently offer meaningful production or cash flow growth (relative to its precious metals producer peers) but does offer a clean balance sheet and a track record of disciplined capital allocation. ... SVM offers the highest revenue exposure to silver among the mid-cap precious metals producers we cover. We estimate SVM will generate two-thirds of its revenue from silver. In our view, this exposure, coupled with the recent rise in investor interest in silver leverage, could provide SVM with a 'scarcity premium' in its trading multiples. We believe this is already occurring: SVM currently trades at 12.4 times our 2021 EBITDA estimate and 1.7 times NAV, vs. the mid-cap precious metals peer group averages of 5.3 times and 1.1 times, respectively."
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