1 Industrial Stock I'd Buy Before Vertiv in 2026​

Wheaton Precious Metals reported a materially stronger first nine months of 2025, with net earnings of $913.4 million versus $440.9 million a year earlier and EPS rising to $1.80 from $0.97; operating cash flow was $1.15 billion (operating cash flow per share $2.55) versus $708 million ($1.56) in the prior-year period. The streaming business — contracts with 23 mines and involvement in 25 development projects — preserves upside to higher gold prices while avoiding mining operating risk, and the company is forecasting a ~40% increase in production over the next two years. Exceptional profitability (gross margin 68.6%, operating margin 63.5%, net margin 54.7%) and the recent gold rally (gold up ~72.5% over 12 months) position Wheaton as a high-margin, lower-risk play on commodities amid weak-dollar and AI-related macro flows, though some analysts (Stock Advisor) did not include WPM in their top-10 picks.

Analysis

Contrarian angles: Consensus underestimates execution and counterparty risk—market prices WPM more like a bond on metal prices, ignoring concentrated project risk; if two or more development projects slip >6–12 months, multiples could rerate downward >15%. The current enthusiasm may also underprice competitive supply of streaming capital; an influx of capital could compress new-deal economics and margin expansion. Historical parallels: post-2011 gold peak showed streamers preserved cash flow but suffered multiple contraction — beware a similar multiple-compression if gold corrects. Unintended consequence: a large gold correction could trigger forced selling in levered mining positions that temporarily depresses spot beyond fundamentals, amplifying short-term pain for long commodity exposure.

Key Decisions for Investors

• Establish a 2–3% portfolio long position in Wheaton Precious Metals (WPM) now; add a further 1–2% on any >10% pullback. Use a hard stop-loss at -15% or reduce to 50% of position if gold spot falls >20% within 3 months.
• Implement a relative-value pair: long WPM / short GDX (equal notional) sized to 1–2% net portfolio exposure to capture streaming premium; rebalance quarterly and close the pair if underperformance >8% over a rolling 3-month window.
• Buy a 4–6 month WPM call spread (roughly 5–15% OTM) to participate in upside into expected production ramp, and simultaneously purchase 6-month 25-delta puts (cost <2% notional target) as tail protection against a >20% gold drawdown.
• Reduce high-beta mining exposure (GDX, NEM) by ~50% over the next 30 days and reallocate to streaming/royalty names; monitor US CPI and next two FOMC decisions (within 60 days): if real 10-year yield rises >100bp, cut streamer exposure by an additional 50%.