Why Gold Resources Shares Plunged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Gold Resources Corp. (NYSE: GORO  ) fell 25% today after the company lowered its production guidance.

So what: On Thursday after the close, the company said it produced about 14,500 ounces of gold, below its own estimates. The company also lowered its 2012 production guidance by 15% to 100,000-120,000 ounces.

Now what: Lower production will have a big impact on profitability this year, so the drop is understandable. The company hasn't released earnings yet, so we'll get a better picture when the company releases final, second-quarter results. Until then I would stay away, looking for a clearer picture at that time.

Interested in more info on Gold Resources? Add it to your watchlist by clicking here.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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  • Report this Comment On July 20, 2012, at 2:21 PM, MrViklund wrote:

    Hum. How fortunate. I went shore this name a couple of days ago on technicals. Maybe it's time to go long again in a few days.

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