A McEwen Mine. Image Source: McEwen Mining
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What: McEwen Mining Inc.'s shares fell 12.9% last month. Despite that drop, they were still up just over 100% for the year to date period through May. A big part of that impressive showing was driven by the commodity rally that started in mid-January and lasted through April, before taking a breather in May. That commodity rally pushed McEwen shares up 145%.
So what: In early May gold and silver miner McEwen Mining reported earnings. The news was actually pretty good, with net income coming in at $0.04 a share, double the tally from the year ago period. And while realized selling prices were down year over year, sales volume gains were more than enough to compensate.
Now what: McEwen isn't a particularly large precious metals miner, but there's some interesting things to note about the company. For example, its all in costs per gold equivalent ounce are around $900, giving it some breathing room between its costs and the current price of gold. Second, and perhaps just as important, it has very little debt -- in fact, at the end of the first quarter it had no debt and roughly $45 million in liquid assets. And it was cash flow positive in the quarter, too. In some ways, McEwen looks pretty well situated compared to other miners.But McEwen is still a precious metals miner and changes in precious metals prices will have an outsize impact on investor perceptions. So with gold down around 6% and silver off about 11% in May, it shouldn't be surprising to see that McEwen's stock price fell last month.
For more aggressive investors willing to invest in a precious metals miner that's, simply put, not a household name, McEwen is probably worth a deeper dive. The shares will move along with precious metals prices, but it has a strong foundation that should hold up to any new storms and provide ample support for growth if precious metals prices head higher.
The article Why McEwen Mining Inc. Stock Fell Nearly 13% in May originally appeared on Fool.com.
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Reuben Brewer has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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