Endeavour Silver: The Market Is Scare
Endeavour Silver (NYSE:EXK) has reported its Q4 2016 financial results, and while I agree with another writer that it was a poor quarter by the silver miner, I think the market is overreacting to the news as the stock has now declined by more than 25%. Part of this decline is due to lower gold and silver prices and a downturn in mining stocks in general, but Endeavour shares have been punished even moreso than its peers. Endeavour has declined by 38.6% in the past month, but the Global X Silver Miners ETF (NYSEARCA:SIL) has declined 19.37%, while peer Great Panther Silver (NYSEMKT:GPL) is down 17.07% and Fortuna Silver Mines (NYSE:FSM) is down 24.62%. While I don't own Endeavour shares, the sell-off in shares hits me hard as a writer/analyst as I previously listed Endeavour as my No. 4 overall silver stock to own in 2017. But I do think the stock will bounce back. Here, I'll discuss Endeavour's Q4 and full-year financial results before breaking down why I think the market has overreacted a bit to the news. For those unfamiliar with Endeavour, the company owns and operates three underground silver-gold mines in Mexico, plus three high-potential development projects. In Q4, production from these mines totaled 1.9 million silver equivalent ounces, as silver production fell 37% to 1.08 million and gold production fell 26% to 11,402 ounces. With lower production and a sharp jump in all-in sustaining costs to $20.11 per ounce, cash flow came in at negative $1.1 million.
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