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Hecla Mining: It Can, And Will, Do Better

May 08, 2020 12:42 AM ETHecla Mining Company (HL)HL.PR.B13 Comments


  • We are always on the hunt for possible outsized returns.
  • The recent selling in Hecla has knocked the stock off its momentum from heading to the $3.00 mark, almost knocking it down to where we would have bought again at $2.25.
  • Production was below our expectations, costs were higher, and the financial results were just below par.
  • The company took steps to have liquidity and issued new guidance.
  • This idea was discussed in more depth with members of my private investing community, BAD BEAT Investing. Get started today »

Prepared by Stephanie, Analyst at BAD BEAT Investing

We are always on the hunt for possible outsized returns. Often, we look for beaten-down names that have been crushed for little fault of their own. At the end of March, one of the stocks we put our members in was Hecla Mining (NYSE:HL) when it was under $2 to catch the most recent rally. That call led to a solid ~50% return peak to trough in four weeks. Now the stock is starting to pull back. The recent selling in Hecla has knocked the stock off its momentum from heading to the $3.00 mark, almost down to where we would have bought again at $2.25. We believe there will be upside again, and in this column, we will specifically hone in on the most recent production numbers and financial performance in the just-reported quarter. That said, we think the company has to do better, as this quarter was rather atrocious overall, but we think the worst is passed, and we are happy to be buyers again if the stock dips sub-$2.25. Let us discuss.

Source: BAD BEAT Investing

Production numbers

We have to say that 2019 marked a year of higher metal production, and coming into 2020, we thought we would see continued strong cash flow generation and an improved balance sheet. While gold and silver prices have increased from a year ago, silver was down from Q4 2019. What is more, in Q1 2020, Hecla unfortunately sold a bulk of silver near the bottom in March. It has to do better. And it will. But as we will see thanks to provisional prices for a Greens Creek shipment, higher treatment charges and COVID-19-related loss of production at Casa Berardi, revenues took a bump.

There was indeed some downtime at mines. With

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This article was written by

Quad 7 Capital profile picture

Quad 7 Capital is a team of 12 with a wide range of experience sharing investment opportunities for nearly 7 years. Quad 7 Capital as a whole has expertise in business, policy, economics, mathematics, game theory, and the sciences. They share both long and short trades and invest personally in the stocks they discuss within their investing group. They lead the investing group Bad Beat Investing include: daily market commentary and market briefing, 1-2 trade ideas per week, 5 chat rooms for a range of sectors, volatility screeners, unusual options activity alerts, and economic calendars.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in HL over the next 72 hours. 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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Comments (13)

HL closed at $2.99 today, May 15, 2020, for a gain of $0.35 and then gained another nickel in after markets trading for a total gain of $0.40 which is a gain of 15% today ! How about them apples ! NUGT (2X Miners) gained 8% today, while most majors such as NEM or GOLD gained approximately 3.5% today. Bully ! May 15, 2020 at 8:39 pm PT. I TOLD YOU SO ! 5-16-20
@james. Nice to see HL finally catch up! My largest long position and expect the PPS to explode higher this year.
arthur_bishop1972 profile picture
I sold too soon ($2.69). Congrats to those who held on.
Today, HL closed at $2.66 for a good gain of $0.15 per share, making a second consecutive Bullish Lower Candle, after leaving a very Bullish Dozier (change of trend indicator ) yesterday on heavy volume which is also very Bullish ! Spot Silver gained well today by $0.17 while Spot Gold lost $10 as measured by SLV and GLD, respectively

In the fine print of the HL Earnings Report released this Thursday before the open, a little noticed detail stated that HL owned Silver Puts to protect downside action on Silver below $15 per ounce, but those gains will show up in the next Quarter Earnings Report; so stay tuned ! May 8, 2020 at 4:53 pm ET.
Good article.
I think it will go up but HL has not been managed properly for years.
arthur_bishop1972 profile picture
I've traded in and out of this stock several times recently with good success. I'd be a buyer at $2.25 too. However, I'm not seeing it going back down to that level. Silver taking off as I type this, and gold is holding its own. The stock hit a low of $2.30 today, but finished above $2.50. Are you planning on holding out for $2.25??
@arthur_bishop1972 I keep adding calls on any weakness, I anticipate this hitting $10 when gold and silver wake up which should happen as the US starts printing to infinity this month.
CyclocrossSam profile picture
$10? Crazy talk.
@CyclocrossSam If CMG can trade at $1000 HL can get to $10...
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