Wheaton Precious Metals (WPM) £31.78

Loss to date: 14.7%

Original entry point: Buy at £37.25, 5 November 2020

It looks increasingly like we flagged precious metal streaming company Wheaton Precious Metals (WPM) at the wrong time.

When we said to buy gold was not far off its record highs but it has since lost a lot of its shine as its safe haven and inflation-busting credentials have been questioned.

However, operationally Wheaton has not done too much wrong and recent first half results (13 Aug) delivered a modest beat to expectations. Revenue and cash flow hit record levels of $655 million and $449 million respectively which helped underpin a generous increase in the second quarter dividend to $0.15 per share.

This represented the fourth quarterly dividend increase in a row and an 50% advance on the second quarter of 2020.

As a reminder Wheaton tends to buy precious metal production in projects where this is a by-product to another metal. This allows it to secure this production at a discount to spot prices.

CEO Randy Smallwood tells Shares he is ‘very bullish’ on precious metal prices but ‘will not risk shareholders capital on that view’ suggesting management’s approach to deals will remain disciplined.

SHARES SAYS: We still like this story despite the hit to sentiment from weaker gold prices. 

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