3 Reasons to Sell Hecla Mining Today

• Report this Comment On September 18, 2009, at 4:54 PM, travis44 wrote:

  Reasons 2 and 3 are opinions, like something else, everyone has one, but the only "fact" - that HL is trading at a premium compared to it's peers is just wrong.

  Today's market cap is $1.0B. One seventieth of that would be $14.3 M or .06 per share earnings estimate.

  If the author does not think the company can make far more that $14.3M on annual production of 10 M oz. then he needs to find a new hobby.

  The author may have found a forward .06 earnings estimate somewhere, but for the past 2 quarters the company has far exceeded the earnings estimates which has led to price spikes, so maybe another price spike is due when earnings are announced in November with expectations this low

  With rising base metal prices pushing the silver extraction cost per ounce down to the $3 range, and a rise in the past month in silver from below $13 to over $17 there is the potential to far more the earnings inferred by the author and thus more price spikes as earnings are announced.

  How it trades in between earnings is more a function of manipulation by money managers that have the weight to do it. The fundamentals will ultimately establish the price in the end however.

  My opinion - don't trade this stock on a short time horizon - it is too volatile, just buy and hold for the long term which is very bright.

• Report this Comment On September 19, 2009, at 12:07 AM, germanaudiotech wrote:

  I agree with the above comment. If I can get into Hecla at a better price, I would personally have no problem holding for the long term. This is a company I do not see why you would not have in your portfolio. I also like EXK.

• Report this Comment On September 19, 2009, at 8:39 PM, pumpthendump wrote:

  SLW is trading at 260 times its earning...

  how about that?

• Report this Comment On September 22, 2009, at 1:50 PM, bruinjoe93 wrote:

  The market is more concerned with future PE. The current PE for SLW is high but their earnings growth is highly leveraged for two reasons. They are going to dramatically increase production and silver prices are going up.

• Report this Comment On September 22, 2009, at 1:50 PM, bruinjoe93 wrote:

  The market is more concerned with future PE. The current PE for SLW is high but their earnings growth is highly leveraged for two reasons. They are going to dramatically increase production and silver prices are going up.

• Report this Comment On September 30, 2009, at 9:48 PM, TimoDOZ wrote:

  The Fool does not really accommodate the listing or analysis of a lot of securities. Big moves higher today in BLIAF, ATBUF,DAYYF, PMGYF,NFYIF etc. Of course there was the 1.3% currency move. No big deal as the BOC will eventually announce an intervention as the Japanese did when the yen gained to below 90. Two days later we can see how much good that did. The Loonie will be battling off 105 (the inverse) after it pushes through par.

  What has all this to do with HL? Well if you own a little AGQ, and a little DBS you might want to throw in a silver miner or some other bizarre leveraged speculation play. Now MF does not like preferred issuances as they are really not stocks but debt. In this case the debt of a DEADBEAT $1 Billion market cap company. There are the CIT s of the ongoing fiasco and there are the CSA s and there are the EROCs etc. All kinds of DEAD BEATS that have stiffed shareholders and in some cases even subordinated and god forbid even senior debt holders. In the case of HL we have the CUMULATIVE preferred HL-PC. selling at nearly 50 cents on a dollar and well below it's conversion ! + ! the dead beat debt payments that it suspended on the common dropping through the price of $3.35. Now the price of the common is pushing up against $5 and the HL-C is having a little move. This has a mandatory conversion at the end of 2009. Five more quarters to resolution. By then silver will have hit the $20 -$25 range. The Yen will have visited 85 and the Loonie will be at 110 and the BOC and new Labour government in a sweat.

  So in the next five quarters the HL-C holders will get all the distributions of $6.50 per share for this year's 4 quarters and all the distributions for next year.

  !!!!OR !!!! Management will come up with a plan.... A plan that would involve a tender offer. Does any one offer cash any more? No they all want to move in on the Cadburys of the world with beaten up stock shares. They sell those commoners down the river and issue new debt or pay off debt with shares in lieu of cash. Instead of 10.3 shares they may jump the offer up to 12 shares if tendering early. An additional 2 -3 shares per share of preferred to settle the debt obligation as well would most likely be in the ball park. That's if no one steps in here in the next 5 quarters and offers $1.3 billion or more for the whole shebang. Remember those DAYYF and PMGYF mentioned at the start of this rant? DAYYF just recently took over their second energy acquisition this year, High Pine Beetle Energy. Paramount just sucked up Profound energy. The Pac men are out there with strong capitalization or much stronger share prices they can use to get stuff like HL. That would involve the preferred shareholders getting all their distributions including the back due as well as being taken out at some place between par and the conversion ratio to the new price of the common once such an offer for the company materialized.

  Lot's of risk in HL-C for an income investor but for a way to effectively own the common at a deep discount to the common share price as long as the US Gov't continues with the unsustainable economic policy. 20 or 30 million Baby Boomers dying of H1-N1 influenza or a more virulent strain of the existing virus could change that. Other wise their's is the tsunami tide that finally swamps the US Pe$o.

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