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 base metals supplier McEwen Mining Inc (NYSE:MUX) dropped as much as 11% today after the company reported fourth-quarter earnings after the market closed yesterday.
So what: Quarterly revenue increased 33% to $13.7 million but net loss ballooned from $11.3 million to $212.8 million, or $0.71 per share. The loss was largely due to a writedown of $233.3 million in the quarter.
Now what: The bottom line is that McEwen Mining is losing money, primarily because metals prices haven't remained high enough for it to operate profitably. I don't see that dynamic changing in the near future, and the company's $12.4 million in cash should be a cause for concern. I don't see this as a buying opportunity and would stay away from this metals play until they can prove long-term profitable operations.