Investing in Silver, CDE Update

Posted on September 24, 2007 , filed under Stocks | Print This Post

For comparison, here is the chart that I posted on September 19th.

Coeur d’Alene Mines Corporation, [[CDE]] has crossed its 50 day MA, a bullish indicator. CDE has a large number of hurdles to face, mainly a history of decreased earnings and a large number of outstanding shares that has the stock prone to short manipulation. Strong gold and silver prices have been supporting CDE. I wrote earlier that we may experience a short squeeze in PM stocks and it appears that we have. CDE has a long way to go in catching up with its peers. The low trailing and forward P/E of CDE suggests that investors consider the future prospects for CDE bleak looking.

I disagree with this assessment. Here is a quote from my September 19th article, Investing in Silver, Coeur d’Alene Mines Corporation Analysis:

The fundamental growth picture looks great. CDE expects to be producing silver at a negative cash cost of 0.41 due to gold by-product credits. The figure was calculated using a price of $550 per ounce for gold and $10 per ounce for silver. With gold now above $720 and silver above $12.90 the cash cost to produce silver for CDE should only improve.

Silver is currently nearly $13.50. CDE has the opportunity to turn from a bad stock to a decent one on the heels of rising silver prices. That expectation alone is enough to create rampant speculation for CDE to play catch up with its peers.

*Disclaimer: The author current holds a position in CDE stock and options.

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1 Comment »

Comment by Paul Wills

2007-09-24 18:50:04

Hey Andy,

I greatly enjoy your blog and agree that gold and silver stocks are breaking out. You might enjoy checking my blog –I have taken the liberty of listing your link on my site.

http://earnosestocks.blogspot.com/

I also like this blog

http://goldstockprophet.blogspot.com/

Thanks again for sharing your work–when I first started blogging I was going to post my actual portfolio (1.3 million) but have decided to only post my stock picks and entry and exit trades.

Paul Wills, M.D.,F.A.C.S.

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