Why Silvercorp Shares Slumped Today

Is this meaningful? Or just another movement?

| More on:
The Motley Fool
10% Promise Series

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 silver miner Silvercorp Metals (TSX:SVM) plunged 13% today after its quarterly results disappointed Bay Street.

So what: The stock has been on a rollercoaster over the past year on volatile silver prices, and today’s Q3 results — EPS of $0.01 versus $0.03 cents in the year-ago period as sales plunged 60% to $24 million — aren’t exactly giving shareholders peace of mind. In addition to low silver prices, management cited several factors at its Ying Mining District project for the disappointing production, giving short-term oriented investors very little reason to stick around.

Now what: Management conducted a comprehensive review to turn its Ying Mining District operations around. “[A] series of improvements covering all aspects of operations, including mine planning and strategy, contractor compensation methods, quality control, and a performance-based (linked to tonnage and grade) compensation package for mine management, were enacted,” Silvercorp reassured investors. “In the next quarter, the Company will monitor the effects of the new improvements and expect to be in a position to provide normalized production guidance for the Ying Mining District when we release our quarterly results in May.”

More important, with Silvercorp continuing to sport a rock-solid balance sheet and beaten-down stock price, the downside might be limited enough to bet on that expectation.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned.

More on Investing

data analytics, chart and graph icons with female hands typing on laptop in background
Investing

2 Oversold Dividend Stocks With 6% and 7% Yields

These top TSX dividend stocks have great track records of dividend growth.

Read more »

Plane on runway, aircraft
Stocks for Beginners

Should Investors Have Cargojet Stock on Their Watchlist?

Cargojet (TSX:CJT) stock has gone through many jumps in the last five years but is down significantly in 2023. So,…

Read more »

IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT
Investing

Maximize Your TFSA: Invest in These Stocks for Retirement Success

TFSA investors targeting solid capital gains in the long term could rely on these Canadian stocks.

Read more »

woman data analyze
Investing

4 Safe TSX Stocks to Buy as Interest Rates Keep Rising

Canadian investors worried about interest rate hikes might want to target secure TSX stocks like Royal Bank of Canada (TSX:RY)…

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Dividend Stocks

Value Investors: 2 Canadian Stocks That Are Getting Way Too Cheap

Brookfield Corp. and Algonquin Power & Utilities are great contrarian candidates for value investors seeking a stock rebound.

Read more »

Pixelated acronym REIT made from cubes, mosaic pattern
Dividend Stocks

These Canadian REITs Could Help You Generate Passive Income

These REITs are some of the best to consider if you want passive income on top of solid growth over…

Read more »

stock data
Dividend Stocks

How to Make a $108K Portfolio in 10 Years With $0 in Savings

Dig into your budget and you're sure to come up with cash. Couple that with income streams and investment returns,…

Read more »

Dollar symbol and Canadian flag on keyboard
Investing

The Economy Surged in Q1: What’s Next for Canadian Stocks?

Canada’s economy is on a roll, but it is still a mixed bag for Canadian stocks like Enbridge Inc. (TSX:ENB)…

Read more »