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Endeavour Silver: We've Revised Our Production Estimates Higher

Apr. 10, 2018 3:56 PM ETEndeavour Silver Corp. (EXK), EDR:CA11 Comments


  • We published an article on 2/28/18 naming EXK a top pick for 2018.
  • Shares are in rally mode thanks to geopolitical tensions stemming from a possible trade war as well as what we believe was the Street's recognition of value in EXK stock.
  • Production numbers showed nearly across the board improvement from a year ago.
  • Based on the results we have revised our expectations for 2018 production.
  • We are awaiting financial results to assess costs but have reiterated our expectations for declining production costs.

We recently named Endeavour Silver (NYSE:EXK) as one of our top picks for 2018. It is interesting because this was long a name we had recommended avoiding given the market headwinds in the precious metals and mining sector, as well as the company specific woes that were being experienced. We were sour on the name for much of 2017. That said, today we want to check back in on our pick just over a month later to see how the name is performing. In this column, we will specifically hone in on the most recent production numbers and discuss these results in light of our call, especially considering that the stock has appreciated 16% since our call.

Recent price action

Shares have appreciated nicely since we highlighted the stock:

Source: Yahoo Finance, graphics overlaid by Quad 7 Capital and BAD BEAT Investing

We believe this action was driven in part by the realization that shares had fallen a bit too much, attracting value buyers, coupled with positive price action in precious metals stemming from immense volatility in equity markets that was driven by the potential trade war between China and the U.S.

Given the fear that was brewing, metals gained and volatility spiked. The miners of precious metals saw benefits in their share prices as the Street bid up equities in the sector. Still, we cannot solely rely on metal prices, despite the strong correlation between moves in the precious metal commodities and the mining stocks. As such, we need to focus on the fundamentals. With that, we are turning to the production numbers as supportive evidence for our long thesis on the stock.

Production ramped up once again

We believe the just announced production numbers support our bullish stance on the company. Production in Q1 2018 showed nice gains relative

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Analyst’s Disclosure: I am/we are long EXK. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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