By 2015 annual production is anticipated to increase by 80% to approximately 43 million silver equivalent ounces

"Silver Wheaton... A Double in Waiting?"

Silver Wheaton (NYSE: SLW, Stock Forum) is up 40% in just seven weeks since I wrote that headline in DailyWealth. My True Wealth subscribers, who bought five months ago, are already up 62%.

Silver Wheaton's business is simply driving to the bank and cashing royalty checks. It barely has any employees and no real operations. It simply cashes royalty checks from silver rights it owns.

It buys rights to that silver for just $4 per ounce. With silver at $36 right now, Silver Wheaton nets $32 per ounce of silver. And if the price of silver goes up, the royalty checks Silver Wheaton receives go up.

The price of silver has been going up. And so have shares of Silver Wheaton.

But you might not have missed it yet...

It's easy to make the case that Silver Wheaton could still double from here.

On Friday, the company held a conference call discussing its 2010 results. Quite simply, the results were awesome.

On the call, Silver Wheaton CEO Peter Barnes said he expects 2011 to bring in "operating cash flows of over $700 million at current prices." Can you believe it? That's $700 million in royalty checks.

The story gets better... "By 2015... annual production is anticipated to increase by 80% to approximately 43 million silver equivalent ounces."

If that's true, and if silver prices stay at $36, where they are today, Silver Wheaton shares could be worth $80 in 2015. That's up from $45 per share today. And that's assuming silver goes nowhere.

If you're interested in the math, it's relatively simple. You take 43 million ounces of silver production in 2015, times $32 per ounce of silver (net), and get $1.4 billion in net cash flow.

The "right" value for Silver Wheaton is 20 times cash flow... The gray line in the chart below is Silver Wheaton's cash flow, times 20. It's tracked the stock price about perfectly. Take a look:

Valuing Silver Wheaton at 20 times cash flow gives the stock a valuation of $28 billion in 2015. As I write, Silver Wheaton is valued at $15.6 billion. In short, Silver Wheaton could nearly double by 2015 if the price of silver stays flat at $36 per ounce.

On the down side, the price of silver would have to fall below $22 per ounce by 2015 for Silver Wheaton's fair value to fall below its current stock price.

This "fair value" number is just my calculation, of course... But the stock price has tracked that number pretty well over history.

Yes, Silver Wheaton has soared. True Wealth subscribers will hopefully be selling half their position soon, locking in 100% profits.

But we'll let the rest of what we own ride... Based on some simple numbers, Silver Wheaton could almost double from here.

Silver Wheaton is up 40% in seven weeks. But so is the price of silver... If you're bullish on silver, Silver Wheaton is your best way to play it.

Disclosure: The author does not hold positions in any of the stocks mentioned