Silver and gold miner stocks Strive for money (NYSE: EXK) rose about 10% in morning trading on Wednesday. Just before 3:00 p.m. EST, this gain was still holding. The likely immediate cause of the stock price surge was a gain in commodity prices, but a trade update released by the company earlier this month likely played a role as well.
About half of Endeavor Silver’s revenue comes from the sale of silver, with the remainder largely derived from gold. It’s a heavy weighting for silver compared to many of its precious metal mining peers. Additionally, silver tends to be more volatile in price than gold, so the stocks of silver-focused miners often fluctuate a lot as well. Gold and silver were trading higher on Wednesday.
However, there is another factor to keep in mind. On January 7, the company released its production results for the fourth quarter and full year. Reading the report was pretty good, with management explaining that production was the highest in two years. Beyond this high-level view, production and silver grades at two key mines have increased dramatically. This suggests that fourth quarter earnings will also be strong. Additionally, the company is optimistic about the coming year as it plans to bring a new mine online.
In particular, a Wall Street analyst provided optimistic 2021 earnings estimates for Endeavor Silver on Tuesday. And the stock has received some improvements to its price target in recent weeks. All of these factors likely combined to help boost investor sentiment about the company on Wednesday.
Investors shouldn’t take the single-day price movement here too seriously. As noted, Endeavor’s stock price swings, often appearing to move for no obvious reason beyond the ever-changing vagaries of the market. There was certainly some good news for the company, so it makes sense that the stock has risen, but the only thing you can really count on from here is more volatility. This is quite normal when it comes to a precious metal miner with a high silver content.
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