The “Backdoor” Way to Profit from the China Solar Boom

Todays top stocks to buyWe reveal two of the best stocks to buy as a game-changing announcement by the Chinese Government is quietly pulling a beaten down metal back into bullish territory…

Until the beginning of July, most of Wall Street had pretty well written off silver for the rest of the year.

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Doom and gloom was all over the markets:

  • HSBC slashed its silver forecast from $33/oz to $26/oz back in April.
  • Bank of America reduced their forecast from $32.70/oz to $24.35/oz at the end of May.
  • Then UBS AG then cut its outlook for silver from $28/oz to $24/oz in June.

Silver just couldn’t catch a break.

Inflation was under control. And rumors were circling that the Fed would begin “tapering” monetary policy very soon.

Couple this with a decline in industrial demand and an increase in silver supply year-on-year, and you had the makings of a bear market.

Silver (and precious metals in general) was getting kicked to the curb by investors.

But then came some interesting news in early July — news that’s put a slight twist in another wise depressing story.

China’s State Council just announced its plans to increase the nation’s solar generating capacity from 21GW to 35 GW by 2015.

That’s a huge 67% increase.  It’s also a staggering leap from the 7 GW of installed capacity achieved just last year.

So what does this have to do with silver?

In short: a lot.

You see, the main technical element in solar is photovoltaic (PV) technology. PV generates electricity by converting solar radiation into direct current (DC) by way of semiconductors.

And PV’s use a great deal of silver.

In fact, a typical panel contains roughly 2/3 ounce of silver – about 20-times the amount found in a typical laptop computers.

Yet despite this phenomenal growth, solar still only accounts for less than 6 percent of all silver demand globally.

When people began to take solar energy seriously at the turn of the century, the industry consumed only about 1 million ounces of silver.

By 2012, solar consumption of silver had soared past 47 million ounces, with growth averaging nearly 50% every single year since 2000.

And it’s not only China that’s going to give silver its long-awaited boost.

According to US research firm HIS Inc., Japan is expected overtake Germany to become the world’s largest solar energy market in the near term.

After achieving approximately 7 GW of installed capacity in 2012, a further 5.3 GW is expected to be added by the end of 2013.

Between China and Japan alone, 91 million ounces of silver will be required to satisfy the growth in solar capacity.

That’s an enormous shot of demand in the arm of the metal — and I think playing the solar industry through “backdoor” silver stocks is an excellent, relatively unknown way to profit.

So what are some of the best stocks to buy now?  I see these two top stocks finishing 2013 on a high note:

Best Stocks to Buy Now:

Silvercorp Metals Inc. (NYSE: SVM) is a Canadian based low-cost silver producer with multiple mining projects in China.

With direct exposure to the Chinese market, it has rebounded from its 52-week low and has shown strong upward movement ever since China increased its solar growth forecast.

Silver Standard Resources Inc. (TSX:SSO) is another low-cost producer  based in Canada that’s also advanced strongly since its late June lows.

The company has key operations throughout the Americas, and is the owner-operator of the Pirquitas mine in Argentina which is one of the largest silver mines in the world.

SSO posted solid earnings results last week and has soared since.  As the silver market strengthens, I expect the upward trend to continue.

The sun is shining on silver…literally.

Time to get onboard.

Yours in profits,
Todays top stocks to buy
John Holt
for Top Stock Millionaire
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