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Arie Goren, Portfolio123 (505 clicks)
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Coeur d'Alene Mines' (CDE) stock price soared 47% from August 01, 2012 to September 04, 2012, while the silver price only rose 16.3% in the same period. Nevertheless I think the stock is still undervalued and has more room to run. The company's sales and earnings are growing at a very high rate. It also generates a very strong free cash flow while having almost no debt. Furthermore, insiders bought the company's stocks last August.

Silver Production Growth

The chart below represents CDE's silver production in the years 2008-2012. The Compound Annual Growth Rate (CAGR) in the years 2008-2011 was 17%, a quite impressive growth rate.

Data: Coeur d'Alene Chart: Arie Goren

* The figure for 2012 is the first half year production multiplied by 2.

The chart below represents CDE's gold production in the years 2008-2012. The Compound Annual Growth Rate (CAGR) in the years 2008-2011 was 68%, a very high growth rate.

Data: Coeur d'Alene Chart: Arie Goren

* The figure for 2012 is the first half year production multiplied by 2.

Net Metal Sales Growth

The chart below represents CDE's net metal sales in the years 2008-2012, the figure for 2012 is the first half year production multiplied by 2. The Compound Annual Growth Rate (CAGR) in the years 2008-2011 was very high, 99%.

Data: Coeur d'Alene Chart: Arie Goren

* The figure for 2012 is the first half year sales multiplied by 2.

Operating Cash Flow Growth

The chart below represents CDE's net metal operating cash flow in the years 2008-2012, the figure for 2012 is the first half year production multiplied by 2. The Compound Annual Growth Rate (CAGR) in the years 2008-2011 was extremely high, 240%.

Data: Coeur d'Alene Chart: Arie Goren

* The figure for 2012 is the first half year cash flow multiplied by 2.

Cash and Cash Equivalents Growth

The chart below represents CDE's cash and cash equivalents in the years 2008-2011.The Compound Annual Growth Rate (CAGR) in the years 2008-2011 was very high, 83%.

Data: Coeur d'Alene Chart: Arie Goren

Total Debt

The chart below represents CDE's total debt in the years 2008-2011.The Compound Annual Rate of Decline in the years 2008-2011 was very high, 36%.

Data: Coeur d'Alene Chart: Arie Goren

On August 14, 2012 the company released an update presentation with the outlook for the second half of the year. According to it, strong second half and full-year 2012 results are expected:

  • Continue to deliver strong operating results
  • Maintain focus on operating costs
  • Continue to generate robust cash flow
  • Repurchase common shares opportunistically
  • Expand reserves and resources at year-end

All the charts above show a very strong up trend in the company's operation. This and the company's outlook should be reflected in the future stock price which has still a big room to appreciate. Since the earnings growth estimates of CDE for the next 5 years (per annum) is 50%, the stock can rise at the same rate.

Source: Silver Stock With Great Growth Potential - Buy Coeur D'Alene Mines