Gold and silver may get a boost through May as the debt ceiling gets closer, but after it is resolved we expect retracement as the dollar strengthens. This is especially true if they can cut costs, but right now, we are unimpressed and think the market will revalue this lower in coming weeks. The greater the price of metals sold, the better the margins on produced volume will be. Volume has been strong and production numbers have risen. It is a commodity and the pricing matters to miners, but so does volume.
Should i buy ag stock driver#
The stock is expensive for the earnings being generated.Ī major driver of performance is the price of silver, gold, and by-products sold.
That said, all-in sustaining costs, or AISC, need to come down even more in our opinion. The company reduced its CAPEX to help save money. The company to its credit is doing what it can to save money. The just reported earnings from First Majestic show they beat on the bottom line, mostly as a result of some lower costs, and while silver prices were down some from a year ago. We think this is a short on valuation given the lack of meaningful earnings power, and lack of real growth. Options consideration: Expiration $7.00 puts for $1.05, and $1.30. This play is for shorting on the American exchanges, where we do our trading.Ĭurrent costs to borrow shares short as of were an approximate APR of 0.70%. Much like we leg into long positions on the way down in names we want to own, we want to leg into this name on the way up for a tactical short. Given that reality, and the fact that First Majestic is operationally weak, we think a tactical short sets up as the stock rallies over $7.00 toward $8.00. Any flight to the dollar after a debt ceiling deal is reached will hurt precious metals. We actually like gold and silver here, but think that First Majestic is simply not performing. It has not been good, and with a weaker dollar near-term, precious metals have been enjoying some relative strength. Style-photography/iStock via Getty Imagesįirst Majestic Silver ( NYSE: AG) is a silver mining company that we have traded several times in the past.
0 kommentar(er)
