Markets

Collect a 5% Instant 'Dividend' on a Trade That Could Make You 40%

Guess whichcommodity has performed the best during the past 10 years. Is it corn, its price spiked by ethanol production and the drought? Copper needed by China for its infrastructure build-out? Cattle, with overseas markets demanding higher quality protein?

The answer may surprise you: It's silver.

According to the U.K. Bank Lloyds TSB, silver has risen 572% since 2002. In comparison, the next largest commodity increase is gold, which is up 428% during the same period.

Silver's appeal is two-fold. First, it's seen as an investment safe-haven. Second, the precious metal is an excellent electrical conductor. As a result, silver is increasingly being used in industrial applications, such as electrical components for circuit parts and medical devices.

In the recently completed third-quarter, silver rose 25% an ounce. European and U.S. stimulus measures helped boost the precious metal and traders fled to it for safety from potentially vulnerable currencies.

One particularly attractive looking silver company is a Canadian midcap silver miner, Endeavour Silver (NYSE: EXK ) . Since it began publicly trading in 2004, the company has increased its silver reserves and production every year. It also mines a small but growing amount of gold.

Currently, EXK has three producing silver mines in Mexico -- one of the more politically stable countries for silver mining in the world. It purchased its third mine in April, a move that doubled the company's proven and probable silver reserves. It also caused its gold reserves to rocket 477%, to 390,000 ounces.

Moving forward, management plans to enhance mining operations, expand exploration and reduce costs. With strong potential for increased production, Endeavour's fundamental and technical outlook isbullish .

As the chart shows, the stock was in amajor uptrend from August 2010 until September 2011.

-- Dr. Melvin Pasternak

Melvin Pasternak does not personally hold positions in any securities mentioned in this article. StreetAuthority LLC does not hold positions in any securities mentioned in this article.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

© Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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