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2/25/09

Hochschild (HOC.L) downgraded by UBS after a great run

Interesting analysis call out of London this morning. UBS has cut its rating on Hochschild (HOC.L) from 'buy' to 'neutral'. HOC.L is 7.1% down right now at 232p. The stock peaked two days ago at 278p intraday, which is quite the blowoff top, is it not? Checking the chart.....

.....it seems like UBS nailed that call and has had a great run so maybe they see no more rebound left in HOC.L, one of the world's largest dedicated silver miners. There's certainly no nitpicking possible at the original UBS call last year and its clients that took the sellside advice must be very happy with their advisors now.

Keep it clear that guys like UBS don't mess around with the little equities that I tend to feature here (like FVI.v, for example). The big boys swim in big pools, which means that in the case of dedicated silver plays choices are rather limited. Apart from HOC.L there's FRES.L, PAAS, HL counts I suppose (but already we're encroaching on larger gold production in the mix) the original Peñoles company of course (from where Fresnillo was spun off), Silver Wheaton (SLW) and then SLV the metal ETF. But then my "off top of head" list starts to get thin. Maybe you can add a couple more, but there aren't many out there, that's for sure.

So with UBS downgrading HOC.L today, it's sending more than a simple message about a single stock, methinks. My best interpretation is one of UBS saying "party's over for a while...time for a bit of consolidation after the nice rebound." But that's just my dos centavos.