Among the precious metal and mining stocks, Coeur Mining (CDE) is one of the most successful, rising more than 281% since the start of 2016. This uptrend has been driven by rising gold and silver prices.
However, in the last two months, CDE stock has fallen 30%. The shares are under pressure mainly due to equity dilution fears. The company disclosed in September that it plans to sell $200 million in equity in order to repay its debt.
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Even after the dismal stock run over the last few months, Coeur Mining (CDE) has outperformed its peers significantly year-to-date (or YTD). Coeur Mining is highly leveraged operationally compared to its closest peers. As a high-cost operator, its operational leverage is the main reason for its outperformance.
As you can see in the above graph, Coeur Mining rose 281% YTD on November 15, 2016. Pan American Silver (PAAS) rose 130%, Hecla Mining (HL) rose 234%, and Silver Standard Resources (SSRI) rose 91%. The prices of silver (SLV) and gold (GLD) rose 20% and 14%, respectively.
The key question is whether Coeur Mining (CDE) can continue its outperformance based on its improving fundamentals. In this series, we’ll perform a fundamental and technical analysis of the company. We’ll also explore CDE’s near-term challenges and opportunities, perform a thorough analysis of costs and production growth, and examine what Wall Street thinks about the company.
Let’s begin with production levels.