Are Silver Stocks Undervalued?

The spot price of gold has soared to a seven-year high in 2020, pushing more investors into the arms of the yellow metal as global markets experience major volatility. However, gold’s little sibling has failed to generate this kind of momentum. Silver’s gains remain muted. Should investors expect this to continue?

Gold started hot as news of the oil shock hit late Sunday but has since retreated into negative territory. The spot price of silver was down 2.3% at the time of this writing. There is an industrial component baked into silver’s fate, which may explain its weakness relative to gold’s positive momentum.

Still, it’s an enticing trade to buy the dips in silver stocks and in physical silver right now.

Silvercorp Metals (TSX:SVM)(NYSE:SVM) is one of my favourite silver stocks. The company boasts an immaculate balance sheet and is a steady producer. Shares last possessed a favourable price-to-earnings ratio of 18 and a price-to-book value of 1.5. The stock last had an RSI of 34, which puts it just outside of technically oversold territory.

SilverCrest Metals (TSX:SIL) is another top silver producer. This company has set its sights on new discoveries and value-added acquisitions. The company has put a focus on Mexico’s burgeoning precious metals industry.

Shares of SilverCrest have bucked market trends are up 13% month over month. The stock has soared 100% from the prior year. This company also has a fantastic balance sheet and is worth targeting for those hungry for silver exposure.