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Mining Stocks to Watch for Earnings on Nov 9: SLW, AG & More

VALE SLW AG SAND OR

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The mining industry seems to have found its footing this year after a difficult 2015 that bore the brunt of a crash in the commodity prices. Particularly, silver and gold have been major movers this year, gaining 31% and 19% respectively so far owing to the slowdown in China, volatile equity markets due to Brexit, a dovish Fed and the introduction of negative interest rates by several central banks (including Japan).

As per the Zacks Industry classification, the mining industry is grouped under the Basic Material sector – one of the 16 broad Zacks sectors. As of Nov 4, 85% of the companies in this sector that have reported so far have put up a 6.4% increase in earnings. Combining with the projected figures of the companies that are yet to report, the sector will log a growth of 4.2% in the quarter.

The 84.6% of the companies in the S&P 500 that have reported registered an earnings growth of 3.6%. Taking into consideration the estimates from the still-to-come 77 index members, total earnings in the quarter is now anticipated to go up 3% year over year on the back of 1.5% higher revenues. This compares favorably with the decline of 2.8% in the second quarter on flat revenues. Though the growth rate is meager, but compared to the declines for five consecutive quarters, this is definitely a positive sign. (Read more: Q3 Earnings Season: An Inflection Point)

Let’s see what’s in store for these miners that are set to report quarterly numbers on Nov 9.

Silver Wheaton Corp. (SLW - Free Report) operates as a precious metals streaming company worldwide. It is the only mining company with 100% of its revenues coming from silver production. It will report third-quarter 2016 numbers after the market closes.

The company had delivered in-line results in the second quarter. Silver Wheaton has a mixed earnings track record and delivered an average negative earnings surprise of 3.53% over the trailing four quarters.

SILVER WHEATON Price and EPS Surprise
 

SILVER WHEATON Price and EPS Surprise | SILVER WHEATON Quote

Silver Wheaton’s Zacks Rank #4 (Sell) and Earnings ESP of 0.00% makes an earnings beat unlikely this quarter. As it is, the Zacks #4 or 5 (Sell-rated stocks) should never be considered going into an earnings announcement. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Zacks Consensus Estimate for the quarter stands at 22 cents, reflecting 80.30% year-over-year growth. Silver Wheaton recently acquired from a subsidiary of Vale S.A. (VALE - Free Report) an additional amount of gold equal to 25% of the life of mine gold production from its Salobo mine, located in Brazil. With the additional stream from Salobo, Silver Wheaton's estimated attributable gold production in 2016 is now projected to be 305,000 ounces. Silver production in 2016 is now forecast at approximately 32 million ounces.

First Majestic Silver Corp. (AG - Free Report) is engaged in the production, development, exploration, and acquisition of silver mines in Mexico. The company will report its third-quarter results on Nov 9.

The company delivered in-line results in the last reported quarter. First Majestic Silver has notably delivered a positive earnings surprise of 11.11% on average over the last four quarters.

FIRST MAJESTIC Price and EPS Surprise
 

FIRST MAJESTIC Price and EPS Surprise | FIRST MAJESTIC Quote

The Zacks Consensus Estimate for the quarter is pegged at 5 cents, reflecting a 191.67% year-over-year surge.  First Majestic Silver recently announced that total production in third-quarter 2016 from its six operating silver mines reached 4.5 million silver equivalent ounces, reflecting a 27% rise year over year. An earnings beat is unlikely for this quarter given the company’s Zacks Rank #3 (Hold) and an Earnings ESP of -40.00%.

Osisko Gold Royalties Ltd. (OR - Free Report) primarily explores for gold and base metals and operates as a mining royalty and exploration company. It will report third-quarter 2016 earnings after the market  closes. In the last reported quarter, Osisko Gold had reported a substantial 275% increase in earnings.

The Zacks Consensus Estimate for the quarter is pegged at 6 cents, a 50% year-over-year decline. An earnings beat is unlikely this quarter for Osisko Gold given its Earnings ESP of 0.00% and a Zacks Rank #4.

Sandstorm Gold Ltd. (SAND - Free Report) concentrates on acquiring gold and other precious metal purchase agreements and royalties from companies that have advanced stage development projects or operating mines. The company is set to report third-quarter 2016 earnings after the market closes.

It delivered a positive earnings surprise of 300% in the last quarter. Sandstorm Gold has posted an average positive earnings surprise of 100% over the trailing four quarters.

SANDSTORM GOLD Price and EPS Surprise

The Zacks Consensus Estimate for the quarter is pegged at 1 cent, a 130% year-over-year climb.  Surprise prediction is difficult for Sandstorm Gold given its Earnings ESP of 0.00% and Zacks Rank #3. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

The company is on track to meet its 2016 gold production guidance of $43,000 to $50,000 gold equivalent ounces. The company’s balance sheet is debt-free with strong capital coming from a highly diversified asset base along with significant availed capital to continue its growth objectives.

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