This Gold Stock Is Cheap -- for a Good Reason
Wheaton Precious Metals (NYSE: WPM) has seen its stock advance more than 30% so far in 2020, exceeding the performance of its closest gold and silver streaming peers. However, that's not enough for the company, which believes investors don't see the full value of what it has to offer. Here's why Wheaton thinks it should be afforded a higher price, why it may not deserve it, and why you might still want to buy it anyway.
Wheaton is a streaming company, which means it provides miners an up-front payment in exchange for the right to buy gold, silver, and other metals at reduced rates in the future. Miners like these deals because they mean they don't have to sell bonds or issue stock, helping them to pay for projects in a cost-effective manner while maintaining their balance sheet strength. Wheaton likes these arrangements because it gets to lock in low prices for gold and silver. That, in turn, means high margins that tend to remain strong even when precious metals prices are low.
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Source Fool.com
