BUY OR SELL-Peruvian metals stocks: how high can they go?

* Shares have soared on rising metals prices

* Bulls still see chance to get in early

* Bears say rally is not sustainable

By Dana Ford

LIMA, Aug 10 (Reuters) - Shares of Peruvian mining companies have skyrocketed this year as investors bet on the steady climb in metals prices, but analysts are split over whether the rise will continue or is overblown.

Volcan (VOL_pb.LM), the heaviest weighted stock in Peru's general index .IGRA, has jumped more than 250 percent since January, while shares of other top miners -- Southern Copper (SPC.LM), Buenaventura (BUEv.LM), Milpo (MIL.LM), Atacocha (ATB.LM), Cerro Verde (CVE.LM) and Minsur (MINi.LM) -- have gained an average of 74 percent.

Still, stocks are nowhere near as high as they were last year, before the economic slowdown and subsequent slam in sales and prices.

Some investors say now is the time to jump in but others, who were badly burned by last year's crash, doubt Peruvian mining stocks still have an upside.

So -- is there room to grow, or is the rally over?

BUY

Edwin Paz, an analyst at the SAB Provalor brokerage in Lima, said Peruvian metals stocks are undervalued and that their fundamentals, combined with strong Chinese demand and a rosier global outlook, will help to push prices up this year.

Peru is the world's top producer of silver, No. 2 in copper and zinc, and ranks sixth in gold.

"The prices of raw materials ... have encouraged my clients to start retaking positions in stocks tied to copper, zinc, gold and silver," said Paz.

Others suggested companies that deal in certain metals.

Rodrigo Zuazo, an analyst with Centura SAB in Lima, recommends buying shares of Minsur, Peru's largest tin miner, which he says has an upside of around 20 percent.

Relatively stable tin prices make Minsur a good buy, said Zuazo, as does the fact its stock has not soared quite so high, nor as quickly, as shares in other mining companies.

He suggested holding Buenaventura, Peru's largest precious metals miner, while Juan Pablo Cordova, a mining analyst with Peru's Banco de Credito, says the company is trading at below its fundamental value and recommends buying it.

SELL

Though shares of Peruvian copper companies have been among this year's biggest winners, most analysts agree now is not the time to buy into the red metal.

"The time to take positions in Peruvian copper companies has passed. And now might be a good time to take profits, if you'd bought in when prices were lower," said Cordova.

He estimated shares of Cerro Verde, a major copper producer, are currently trading at around $10 above where they should be, based on fundamentals.

Southern Copper, one of the world's largest copper producers, is likewise above its value, said Zuazo, who recommends selling.

He said calls on other miners, like Atacocha and Milpo, are more of a mixed bag and are under review, though he doubts zinc, lead and silver prices will support a buy recommendation for this year.

In the longer term, Zuazo sees metals prices, and in turn, Peruvian mining stocks, rising but says they are unlikely to approach the record levels hit in 2008 any time soon.

"We believe prices will go up, but likely at a much slower pace than we saw in the first half of this year," he said. (Editing by Christian Wiessner)