Investing in silver is reaching a six-year high. This company is seeing a rise in hedge fund interest, and recent selling of its shares after the Roxgold acquisition, looks overdone.
Fortuna Silver Mines Inc. (FSM)
From Adrian Day’s Global Analyst
Fortuna Silver closed its acquisition of Roxgold, creating a low-cost, diversified, growth-oriented intermediate gold and silver company. As discussed previously, we are very bullish on this combination, and think that Mr. Market continues to provide us with an excellent opportunity to buy a quality company at a low price.
Any time there is a merger such as this, there are some dissatisfied shareholders and sometimes shareholders whose combined position become too large. So, there is always some selling (and indeed, the short position in Fortuna was the largest gainer last week, suggesting some shareholders want to sell now before they have received their new shares).
The stock price has dropped from almost $8 a share immediately before the merger announcement down to where it traded a year ago. This will not last long; Fortuna is a strong buy at the current price.
Adrian Day, Adrian Day’s Global Analyst, adriandayglobalanalyst.com, 410-224-8885, June 11, 2021