I maintain two indices for premium subscribers so that we can better track the junior precious metals sector. These four charts should give you a better idea of the current state of the sector.
The first chart shows our junior gold index over the last year. The junior gold index consists of 25 companies, most of which are in the neighborhood of $100-$600 million in market cap. How a billion dollar company is a junior, is beyond me.
Next we show our junior index versus the HUI (red) with the index (blue). Note that the ratio is on the cusp of a multi-year breakout, which suggests major outperformance by the juniors over the next few years.
Next is a chart of our junior silver index, which consists of ten stocks, which are all below $500 million in market cap. It looks like the index has good support at 100.
Here we graph the junior silvers against the HUI. The resulting ratio is in blue, below the junior index itself (black).
Interestingly, the junior golds are near multi-year highs against the HUI while the junior silvers are not even close. While we think the outlook for the junior sector is very promising (long-term), one should note that on a value basis, the junior silvers look to be the better option.
For more analysis on the junior sector and analysis of specific junior companies, consider a free 14-day trial to our premium service.