Wheaton Precious Metals: 30% Annualized Returns With Longer-Dated Covered Calls

Wheaton Precious Metals faced valuation compression after silver's recent price drop and a poorly timed deal with a 3% IRR at $70/oz. With silver under $60/oz, speculative excess has dissipated, and WPM's stock price now reflects the negative IRR of its recent acquisition. We see a cautious buying opportunity for WPM as its price-to-sales ratio approaches the attractive 10x threshold, despite recent setbacks.

A few months back, the hype for silver was at its maximum, and conspiracy theories were the rage again. These included "COMEX defaults" and "China cornering the market". The Silver Institute did not