Endeavour Silver (NYSE:EXK) is about to get crushed. This is a name that I recommended profit taking on last spring but is a name that I have wrestled with for some time, but have maintained a buy rating on pullbacks. The stock, along with many in the sector experienced a meteoric rise in 2016. I was really surprised at first when the company decided to slash production entering 2016; however, upon further consideration, I concluded the long-term survival of the company took precedence and so saving cash was key. Still, there are concerns over performance and the stock is about to implode today on the back of the just reported Q4.
In this column will discuss the production and finances, as well as the outlook for the name to shed light on why the stock is getting smashed. Metals have retracted a bit at the end of 2016 and into 2017. Now, I had no real expectations for output, and truthfully the production numbers disappointed me because they came in below the company's planned production. Endeavour churned out silver production that was down year over year at 1,088,845 million ounces for Q4 2016. That, of course, is a 37% decline from last year. While this was planned, it is still an 'ouch' moment. Gold production came in at 11,402 ounces, a whopping 26% decrease year over year. Using a 75:1 ratio for silver to gold, it is important to note that for the quarter, silver equivalent production was 1.9 million ounces. Of course, this is down from last year in line with guidance. Metals sold were down heavily as well, with just 946,546 ounces of silver and 11,004 ounces of gold sold, dropping 44% and 28%, respectively.
Now I have to tell you that........READ MORE
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