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Endeavor Silver Shows Strength in 2014

By  +Follow February 21, 2014 8:46AM
Tickers Mentioned:

Small-Cap Star Endeavor Silver Corp. (EXK) had a rocky 2013, with big gains and losses. On the whole, the company started the year still in a lengthy downtrend that took the stock from its peak in 2011 at more than $12.50 to its 52-week low of $2.88 in early July of last year.

Rebounding Silver Prices, Strong Production Drive Gains

Of course, it’s hard to see this as reflecting too harshly on Endeavor as a company as its stock peaked around the same time silver prices did. Silver came very near touching $50 an ounce in Q2 of 2011, and by early July of last year it was under $20 an ounce.

However, silver is bouncing back and Endeavor with it in 2014. However, other junior silver miners would be hard pressed to match the over 55 percent gain experienced by Endeavor since the beginning of 2014. The company released strong 2014 projections on Jan. 22, with guidance for its three underground mine in Mexico (Guanaceví Mine in Durango State and the Bolañitos and El Cubo Mines in Guanajuato State) apparently impressing investors and traders alike.

"After delivering tremendous production growth in 2013, we plan to hold production relatively steady for 2014, hone the operations and position the Company for a turnaround in metal prices later this year,” said CEO Bradford Cooke at the time. “Our capital budget is significantly reduced this year which will help boost free cash-flow."

"Our focus this year will be on further refining our operating and financial performance through initiatives to improve productivity, reduce operating costs and enhance cash-flow at all three mines, as well as completing the operational turn-around at El Cubo,” he continued. “We have resumed exploration around the mines in order to replace depleted reserves and expand resources, but green-fields exploration will be minimized to drilling our emerging new, high grade discovery at the San Sebastián property."

Strong Technical Signs During Current Uptrend

On the whole, Endeavor’s stock has been sharply positive this year. The stock crossed its 20-day moving simple moving average (SMA) in December, butted up against its 50-day SMA for about a week in early January before breaking through, and crashed through its 200-day SMA by mid-month. The sharp climb that took it through the 200-day SMA hit resistance at around $4.70 a share and retreated once before breaking through. Since then, it’s been climbing and hasn’t looked back, currently hovering near $5.65 a share and a 52-week high.

Fundamental Analysis Also Appears Strong

A look at Endeavor’s fundamentals may indicate why the stock has so much strength. The company managed to dramatically increase revenue from 2011 to 2012 despite crashing silver prices during this period, and its P/E ratio is fairly solid and just under 13.

And if one uses the DuPont Model for analysis, there’s more reason to potentially feel bullish about the stock. While a first look at Endeavor’s ROE shows it coming in well below industry average, a deeper look shows a company trending in the right direction for the right reasons.

Endeavor’s net margins, a key indicator, are significantly better than the industry average. And while the company is well below industry average for asset turnover and equity multiplier, it’s worth noting that, if you have to choose, it’s better to be below average than above for the equity multiplier. A lower equity multiplier means less debt, and while industry average is ideal, less debt is better than more debt in most cases.

What’s more, looking at trends over time, Endeavor’s ROE, net margin, and asset turnover are all improving year-over-year. Net margins improved considerably from 2011 to 2012, as did ROE, and asset turnover appears to be trending closer to industry average.

On the whole, Endeavor appears to be a promising stock that, while dependent on silver prices maintaining some stability, may also be a best-in-breed pick for junior silver miners. There’s clearly some potential here that 2014’s gains aren’t a mirage and this company could keep growing.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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Results for EXK
17 Apr 15 22:45:17
$EXK releasing Earnings on 5/6 Before Open (Confirmed). Anybody buying/selling in Earnings? http://t.co/zgmsrEn7U7
Techno Analyst
17 Apr 15 06:44:58
$EXK up 1.52% over $2 looking great!!!
Justin St Julien
17 Apr 15 06:39:49
$exk here I love this play but I'm waiting on funds to clear soooo http://t.co/dckOsNZvlD
Techno Analyst
16 Apr 15 22:08:48
$EXK it will be one where you wake up the next day/it's over $2s/you are like WTF!!! NICE INVERTED HEAD AND SHOULDERS http://t.co/BTSdAXOgGl
Analyst Ratings
16 Apr 15 13:57:57
Want the latest upgrades & downgrades for $AMCC $KWK $KEP $PLXT $EXK? Checkout ARN Daily http://t.co/nSJuDsYidj
Time=Best Stock
16 Apr 15 08:51:00
RT @Bizquick: Actually, $EXK will be the type of stock that will pop over $2.25 without warning IMO keep on watch!!!
Techno Analyst
16 Apr 15 08:47:50
Actually, $EXK will be the type of stock that will pop over $2.25 without warning IMO keep on watch!!!
Techno Analyst
15 Apr 15 21:01:03
$EXK up 2.02% looking good it's holding but one of these times it will GAP UP IMO! Got to get used to MAKIN' BANK RIGHT?? THERE YOU GO!!!
Techno Analyst
15 Apr 15 08:03:20
$EXK i could see this one surging very soon...keep on watch!!!
15 Apr 15 07:30:05
$EXK: Zacks Short Term Rating on Endeavour Silver Corp (NYSE:EXK): http://t.co/VxDE5ZTkIW
Techno Analyst
14 Apr 15 20:49:33
Eli Pritsker
14 Apr 15 20:04:27
Techno Analyst
14 Apr 15 19:49:22
Techno Analyst
14 Apr 15 19:39:14
Stocks News&Markets
14 Apr 15 06:17:14
$EXK - Christos Doulis Separates The Precious Metals Saints From The Sinners http://t.co/ApEji1WCtV
14 Apr 15 06:17:12
$EXK - Christos Doulis Separates The Precious Metals Saints From The Sinners http://t.co/zFQdak8HMJ
Seeking Alpha
14 Apr 15 06:02:13
Christos Doulis Separates The Precious Metals Saints From The Sinners http://t.co/y68JBJMtIR $CADGF $DBEXF $EXK $GLGDF $PIRGF $RIOM $TAHO
13 Apr 15 22:30:30
$EXK Since last ER, stock dropped 8%. Will drop continue aftr ER on 5/6 Before Open? http://t.co/6OIRguL3Di
Penny Stock Secret
12 Apr 15 21:41:21
Yesterday We Made $89,000 In Just One Trade More Info Here http://t.co/NovWYe2RAx .. $EXK $EXL $EXL-B
Breaking News Now
12 Apr 15 12:10:01
$EXK: Company Shares of Endeavour Silver Corporation Drops by -1.99%: http://t.co/Lxrzvf68Qz
By  +Follow February 21, 2014 8:46AM



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