PAN AMERICAN SILVER LONGS FINALLY CATCHING A BREAK FROM SILVER'S MISERABLE DECLINE

Pan American Silver Corp.

shares have been on the rise in the last couple of weeks after a long, long time either declining or just sitting there annoying the longs. The rise has no doubt been tied to the move higher in the EURUSD currency cross and to the corresponding rise in the price of silver. Can the stock, which sports an attractive 5.1% dividend yield, continue to rise? That depends on what the outlook is for the euro / US Dollar cross and for silver – and to a lesser degree Pan American's underlying fundamentals. Let's take a look at everything to get an idea of what may be in store for the stock… What the bulls see in Pan American… • A delicious 5.1% annual dividend rate • Some cheap valuation metrics: o A price-to-sales of 2.09 and, o A price-to-book of 0.99 • A relatively clean balance sheet: o Cash of $330.41 million versus total debt of only $81.22 million o A debt-to-equity ratio of 5.17% o A current ratio of 3.51 • Positive levered free cash flow of $241.21 million What the bears see in Pan American… • Some questionable valuation metrics: o A market capitalization of $1.54 billion versus an estimated enterprise value of only $1.22 billion o A (temporarily?) infinite P/E ratio based on consensus EPS estimates of -$0.03 for next year – versus a revenue and EPS growth projections that are all over the board. • Profit margins (or loss margins) of -72.56% • Return on assets of -14.43% • Return on equity of -28.99% The technical take on Pan American shares… Technicians note that Pan American Silver shares have broken out of a consolidation pattern short-term and seem to have room to run up to around $10.98 before the next major resistance check point is tested. Support for PAAS shares comes in at $9.75 – which is the lower edge of the recent upside gap that occurred on the daily chart. There's more (horizontal line) support just below at the $9.72 - $9.73 range. PAAS shares could get a continued short-term boost from a strong euro / weak dollar phenomenon that has a bit more room to go before potentially reversing. Overall… Traders will likely be looking to buy PAAS on a pullback to $9.75 to $10 in the short-term. The technical call is for a bit more upside in the euro as well as with silver. Thus, a bit more upside in the shares of PAAS is a logical expectation. What happens when the euro hits resistance at 1.15 will determine a great deal of silver's - and hence PAAS's fortunes.