Speaking of /SI, WPM is in the toilet thanks to /SI prices. The last 3 Qs they beat earnings by 18.8%. 6.7% and 14.3% and they should have no trouble hitting 0.60 for the year on a $17.49 stock (p/e 29) in an off year.
| Year End 31st Dec | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | TTM | 2018E | 2019E | CAGR / Avg | |
| $m | 849.6 | 706.5 | 620.2 | 648.7 | 891.6 | 843.2 | 857.2 | 823.4 | 920.5 | -0.1% | |
| $m | 600 | 387.7 | 202.9 | -157.3 | 223 | 74.7 | 328.9 | -34.1% | |||
| $m | 586 | 375.5 | 199.8 | -162 | 195.1 | 57.7 | 315.1 | 271 | 318.7 | -37.1% | |
| $ | 1.65 | 1.05 | 0.56 | -0.41 | 0.45 | 0.13 | 0.71 | -39.8% | |||
| $ | 1.65 | 1.05 | 0.68 | 0.22 | 0.56 | 0.46 | 0.69 | 0.58 | 0.69 | -22.3% | |
| % | +6.5 | -36.0 | -35.6 | -67.2 | +151.4 | -17.0 | +13.2 | +25.6 | +18.2 | ||
| x | 38.1 | 25.8 | 30.3 | 25.7 | |||||||
| x | 1.49 | 1.01 | 1.67 | 6.63 | |||||||
| Profitability | |||||||||||
They won't recover unless /SI does but it's a slightly safer way to play silver than just risking the Futures. In the OOP, we have the 2020 $15 calls half-covered with the $25 calls and we sold the $20 puts for $3.30 so net $16.70 and we're getting close, but this is below where we came in in Feb - so another chance to play.
As a new play on WPM, I like:
- Sell 10 WPM 2020 $20 puts for $3.70 ($3,700)
- Buy 20 WPM 2020 $15 calls for $3.85 ($7,700)
- Sell 20 WPM 2020 $20 calls for $1.55 ($3,100)
That's net $900 on the $10,000 spread that's $5,000 in the money at $17.50 and your worst case is owning WPM at net $20.90 but the upside is a nice 10-bagger at $9,100 and it's not like we're asking for much.
