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XMFSinchiruna (28.56)

I Defy the World to Find a More Profitable Company

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March 04, 2011 – Comments (28) | RELATED TICKERS: SLW , AAPL , XOM

I'm making a bold call here Fools. I challenge anyone, anywhere in the world to find me a publicly traded company that's more profitable than Silver Wheaton.

You blogging Fools are my bread and butter, so lend a Sinch an hand if you could be reccing this article, posting a comment to it, or perhaps picking your #1 favorite stock and seeing how it matched up against SLW during the fourth quarter. The more you get the ball rolling by reccing and commenting, the more folks in the online universe this article will reach. I want as many people as I can get this article in front of to have a chance to prove me wrong here, because only then can I truly declare SLW the heavyweight profitability champion of the world. And if I'm wrong and it's not the most profitable company in the world, all the better because we no doubt will have pinpointed some exciting potential investments in the process. This article is all about community intelligence, which is what sets the Fool apart from other online financial sites. Let's show the world what community intelligence is really all about.

Thanks for helping out any way you can. Tweet it, post it, link it, send it, share it ... do whatever it is that you do. :)

http://www.fool.com/investing/general/2011/03/04/the-most-profitable-company-in-the-world.aspx

The Most Profitable Company in the World

Thank you in advance for your participation in this challenge, whatever form that might take.

28 Comments – Post Your Own

#1) On March 04, 2011 at 4:49 PM, L0RDZ (70.68) wrote:

Okay how about  BHP

In the first half of its fiscal year, BHP made a record $10.5 billion.

generated over 18 billion in cash from operations.

 

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#2) On March 04, 2011 at 4:54 PM, XMFSinchiruna (28.56) wrote:

L0RDZ

Thanks for getting the ball rolling.

What's was their net profit margin during the most recent quarter?

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#3) On March 04, 2011 at 5:03 PM, L0RDZ (70.68) wrote:

43%

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#4) On March 04, 2011 at 5:06 PM, L0RDZ (70.68) wrote:

I see where you're going with SLW but eventually those silver purchase agreements will need to be reworked  and I doubt they'll get as  favorable terms.

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#5) On March 04, 2011 at 5:11 PM, kdakota630 (32.79) wrote:

Some info on Silver Wheaton and some other silver companies I just found while trying to dig up some more info on Silver Wheaton.

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#6) On March 04, 2011 at 5:26 PM, monksnake (41.16) wrote:

WRLS, Telular Corp. 

It's more profitable, but not nearly on the same scale as SLW.

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#7) On March 04, 2011 at 5:50 PM, Bays (34.17) wrote:

WRLS???

Profit Margin (TTM)% 7.60

Income/Employee 452,241.00

How does that compare?

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#8) On March 04, 2011 at 5:58 PM, goldminingXpert (31.11) wrote:

I could have sworn this was going to be about CCME given the Citron article on the same theme.

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#9) On March 04, 2011 at 7:16 PM, SockMarket (89.87) wrote:

NuStar -

Profit margin 108%

Op margin 95%

This seems awfully high to me, but both Google and Yahoo seem to have it. No idea if there is a 1 time event that boosted it. 

 

Pitt & WV Rail (PW)

both margins just over 83%

 

and a few from a google stock screen:

BIP, SB, AB, TCLP

 

that said SLW is very good. It certainly beats my favorite silver play (AG). That said, good margins may actually be a negative in an environment where silver is rising quickly. co's with lower margins will experience faster profit growth.

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#10) On March 04, 2011 at 7:26 PM, L0RDZ (70.68) wrote:

Sockmarket  

How the heck does someone get a profit margin over 100%

That sounds like some Obama math to me.  Thats like earning 100 dollars in revenue and  ending up with 108 dollars in your bank account  only a magican or a cook booker.

Perhaps when they teach you about imaginary numbers in high school  ~  i should have been paying more attention. rolls eyes.

 

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#11) On March 04, 2011 at 7:43 PM, SockMarket (89.87) wrote:

lordz

Tell me do you just take shots at everyone who posts stuff you don't understand? 

also, I know you don't like obama, but can't you just keep your thoughts on stocks?

 

that said, >100% prof margin comes from when income comes from a source other than sales, which is possible. It is a bit of an accounting gimick (obviously) but it is still there, and technically real.

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#12) On March 04, 2011 at 7:45 PM, XMFSinchiruna (28.56) wrote:

Guys, don't forget to bring the conversation to the article comments ... :) That's where we can ensure this article makes the rounds. Please note the rules of the game as stated in the article ... entries are requested to be accompanied by a link to the comnpany's Q4 or equivalent fiscal period's earnings release so we can all check for ourselves.

Thanks, and happy hunting!

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#13) On March 04, 2011 at 7:48 PM, awallejr (79.96) wrote:

I'm not going to knock SLW, but you are concentrating on one number (profit margin) which can be surpassed by lower profit margins with higher volume.

In your 2nd link you were projecting SLW getting 43million ounces of silver by 2015.  Let's say SLW nets out $ 50 ounce.  Your total profit is 2.15 bilion dollars.  That divided by the 345 million shares outstanding, gives you an EPS of about 6.26.

I say AAPL crushes that.  I say XOM crushes that. I say any company with an EPS over 6.26 beats it.

 

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#14) On March 04, 2011 at 8:11 PM, L0RDZ (70.68) wrote:

Why so touchy or serious Sockmarket ?

I  love Obama,  greatest community organizer ever. 

I was just shocked and skeptical to see such a high number,  no offense meant.

 

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#15) On March 04, 2011 at 10:39 PM, MegaEurope (22.61) wrote:

Hysan Development, a $4.8B Hong Kong real estate company, is close.  I count 75% operating margins.

I'm pretty sure I can find something that beats 83% operating margins, I'll keep looking.

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#16) On March 04, 2011 at 10:53 PM, MegaEurope (22.61) wrote:

NHI, a US company also at 75%...

I'm seeing a pattern here, if anything is over 83% net normalized profit margins it will probably be a real estate trust.

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#17) On March 05, 2011 at 1:13 AM, catoismymotor (62.11) wrote:

Chris,

I just re-read something I wrote to you a few days ago with regard to SLW. It was not meant to come off as rude or disrespectful. I was trying to come off as funny. 

Best wishes, warmest regards and the most sincere of apologies.

Cato

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#18) On March 05, 2011 at 1:32 AM, DarthMaul09 (30.51) wrote:

Thinking outside the box, I would pick a private non-tradable stock called the Federal Reserve Bank.

It can mark to imagination anything on its books, assuming it would ever be audited; and it can print as much money as it wants, which the US citizens must accept as payment.

In the real world, now that SLW has begun to pay a dividend, it is likely the best stock going forward.  Low risk and a huge return.

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#19) On March 05, 2011 at 11:24 AM, XMFSinchiruna (28.56) wrote:

L0RDZ

I recommend you study the individual silver stream arrangements that comprise their portfolio. Most are either life-of-mine arrangements with estimated mine lives of 20+ years, or are specified timeframes of similar duration.

It is not correct to say that their silver streams will need to be "reworked". They can add new streams, and until new streams at these prices are announced, it is too early to determine whether or not that $4 cost basis will remain as their signature formula. I suspect that it will, and that the contracts will simply be adjusted to where SLW's acquisition cost will rise somewhat. That would affect metrics like ROE, but not net cash margin.

I place SLW's all-in cost of silver (including acquisition costs) beneath $7 per ounce. That figure will likely trend higher, but only very, very slowly. Their cash margin will grow far faster, so net profitability will still increase in a rising silver price environment.

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#20) On March 05, 2011 at 11:25 AM, XMFSinchiruna (28.56) wrote:

DarthMaul09

I love it! Post it to the article! :)

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#21) On March 05, 2011 at 11:31 AM, XMFSinchiruna (28.56) wrote:

MegaEurope

Happy hunting, but keep in mind the metric to beat is a net profit margin of 82%. Still, anything close will be interesting to see, so I encourage all of you to post the companies that come close.

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#22) On March 05, 2011 at 11:38 AM, XMFSinchiruna (28.56) wrote:

catoismymotor

Since I have no recollection of it, I'm clearly over it! :) Sometimes in seeking to state my views clearly and succinctly, I think I also come across as taking personal offense to things when really I'm just interested in getting down to the core of an idea.

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#23) On March 05, 2011 at 4:29 PM, caterpillar10 wrote:

i concede up front that my faves can't win by your rule yet i submit them as peers in the opportunity they present. while i like BHP as well, the difference is NOV and GTLS still have their full behemothood well before them. Dealing with backlogs is their only real problem at this point.

warning: as always the price you pay is key.

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#24) On March 05, 2011 at 9:49 PM, catoismymotor (62.11) wrote:

Chris,

I'm glad all is well. Thanks to your list of little miners the other day I have done DD to the extent of annoying my lovely wife. Lets just say a certain operator in Mexico has left a impact on me. 

Cato

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#25) On March 06, 2011 at 9:29 AM, XMFSinchiruna (28.56) wrote:

catoismymotor

:)  Glad to hear it!Impact has become a top-tier holding of mine, and is very well positioned to enter my top ten holdings.

Now go do something nice for your wife!  :)

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#26) On March 06, 2011 at 8:51 PM, 3coast (< 20) wrote:

Sinch,

 Absolutely fantastic coverage of the PM sector.  Can't thank you enough for sharing your thoughts through your writings.

Was wondering your thoughts on this interview with SLW's CEO Peter Barnes...

http://www.cnbc.com/id/15840232/?video=1829138921&play=1

In the interview, when asked about hedging he states something to the effect we may start thinking about it at $50 silver... 

I was pretty surprised that he threw that in there... what are your thoughts?

I am long SLW and plan on riding it through the course of this bull market but if they start throwing hedges on at $50 silver or even $75 silver - will certainly make me reevaluate.

 

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#27) On March 06, 2011 at 11:10 PM, XMFSinchiruna (28.56) wrote:

3coast

That is surprising. I'll give them a call and get back to you.

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#28) On March 11, 2011 at 3:58 PM, rebello15 (< 20) wrote:

Sinch, do you have an email address I can ask you a few questions at?

 

Thanks a bunch

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