Shares of Coeur Mining (CDE), a miner primarily focused on silver and gold, dropped 15% last month, according to data from S&P Global Market Intelligence, as investors continue to deal with the bitter taste left by the company's late-February release of its Q4 2018 earnings. Commodity prices, moreover, compounded investors' bearish sentiment in March as silver and gold dipped lower throughout the month.
While the stock began 2019 on an auspicious note, rising 15%, the past two months have been less opportune for investors as shares have now dropped 9% year to date.
Coeur Mining's stock has been punished by investors who were disheartened by the company's recent performance, and shares have failed to bounce back to the price at which they were trading before the company's release of its Q4 earnings.
In terms of both income and cash flow, the company disappointed investors. On the top line, the company reported a 12% year-over-year decline, while net income, which was $10.9 million in 2017, fell to a net loss of $49 million. The declines were even more notable in terms of the cash flow statement. While operating cash flow plummeted 90% year over year, free cash flow, which totaled $60.4 million in 2017, plunged to negative $120.7 million in 2018.
Considering the high correlation between mining stocks and the associated commodities that the companies dig out of the ground, it's not surprising that Coeur's stock headed south last month, since the prices of gold and silver dipped 1.8% and 3.28%, respectively. Investors who haven't checked in on Coeur recently may be surprised to find that the declining price of gold had such a material effect on the stock, but the company has lately been working to increase its exposure to the metal. Whereas silver accounted for 69% of revenue and gold 31% in 2010, the company recently reported that gold accounted for 68% of revenue in 2018 and silver 31%.
Although the stock's slide in March may have been disheartening for investors, it's to be expected considering the drops in commodity prices. Rather than focusing on silver and gold prices, investors would be better served monitoring the company's operational performance.
For example, in the short term, investors can confirm the company succeeds in executing the upgrades -- expected to be completed in Q2 2019 -- to the crushing facilities at the Rochester mine in Nevada. On the recent conference call, management stated that the upgrades "are expected to increase our crushing capacity, reduce operating costs, as well as improve timing and overall silver recoveries."