Q: Would PAAS be a good buy now after the sell-off on MAG announcement? I have no silver exposure and looking long-term.
5i Research Answer:
We think so; typically when a deal is done for shares (in this case 75%) the stock of the buyer sinks as investors look at the large number of new shares to be issued. But we like MAG, and we think the deal makes sense to consolidate and diversify PAAS's existing operations. Expect some volatility until the deal closes but we would be comfortable buying PAAS.