First Majestic--Great company, but how far will it fall???

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JoeTiger
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First Majestic--Great company, but how far will it fall???

The subject says it all.

I really like AG (First Majestic Silver), and I think they are an outstanding silver investment.  However, their stock price has taken a pretty healthy tumble over the past several weeks (from $27 to $16.50 yesterday).

How much lower do you expect it to go?  It hit $10.50 on 1/25 (right around Turd's Bottom), but I don't know if it will drop that far.  Thoughts?

Edited by admin on 11/08/2014 - 06:10

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infinite_easing
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How much lower do you expect it to go?

Back in July 2010, it was around C$4.00; after the Jackson Hole Miracle, it ramped to $7.60 by October 26. It then rose nicely after that. I am expecting it to drift lower over the summer; but that's a guess based mostly on the prospect that The Bernank will await politicians on bended knees before QE3 is rolled out in the autumn.

Nemesis
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Basic Facts

To whom it may concern some arguments to hold first majestic. I hope its useful for some new readers:
(1) pure silver play, > 90% from silver [2] 
(2) unhedged [2]
(3) 2010: 7 Mio. oz Ag  [2]
(4) Sprott likes it (3.5 Mio. shares) [1]
(5) 85 Mio. USD cash (3/2011) [2]
 

Besides Keith Neumeyer is doing a great job. Bonus: He secured AG as trading symbol and he runs an online shop to sell silver rounds for spot price + 3 USD. (about 5 to 10% of production).

------

[1] http://www.tickerspy.com/pro/Sprott-Asset-Management?refer=yhoo_5594_sprott

[2] http://www.firstmajestic.com/i/pdf/Factsheet.pdf

[3] http://www.store.firstmajestic.com/

jmmergott
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dividend

It seems to be holding in the 16 region nicely.  I don't know if it will fall further,  but I wouldn't worry about it going back to 10.  I've been a shareholder since it was chilling in the 3 region, and I've gotten to know those guys a bit.  One thing I can say is they've never steered me wrong.  If they told me, "Our guidance says 7 million ozs this year, but we think we can do 7.5"  By the end of the year, it was 7.5.  Next year they are looking to mine 10 million ozs.  Believe me, they'll do it.  They are also expecting to start paying a dividend by the 1Q next year.  Break down:  Assuming silver stays at 30 (and I believe it will go higher)  They will make a $22/oz profit on 10 million ozs.  Now consider that they have roughly 100 million shares outstanding.  That's some serious earnings.  Factor in a dividend, and then recalculate that all using a $50 silver price and still an $8 cost per oz.    You may want to also consider that they bought a significant amount of reserves (50 million ozs I believe)  back in 2010 for about 50 cents an oz.  Their geologist thinks there is more like 300 million oz's there.  These guys are set on what they already got to be pumping out 10 million oz's a year for a LOOOOONG time. You tell me, is it a good buy at 16, even if it may fall to 13 or so for a few weeks?

Streetside
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Strange price action

I am wondering about today's price action in First Majestic Silver (NYSE: AG). Spot silver was down around 3% today as of 4 pm while AG was up .77%. It trended upwards all day today despite spot silver trending downwards. Today's odd price action follows a huge surge of 10.8% on Tuesday. Anyone have any idea about what might be happening?

ferretflat
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trading

AG has a tendency to either go up or down a dollar 3 or 4 times a week.  That makes it easy to trade, plus the price is high enough to easily margin.  Any day it goes down a dollar, buy it. Any day it goes up a dollar, sell it.  Buy it under $17, and if you are stuck with it it's still a good long term hold.

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Streetside
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First Majestic's odd price action today correlates with SLW

I just noticed that First Majestic's odd price action today (diverging in opposite direction from spot silver) correlates tightly with Silver Wheaton (SLW). I wonder if maybe this is because a large hedge fund or group of HFs decided to go long on silver miners. Anyone have any thoughts on this?

ghost
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First Majestic price action 6/23

I noticed this also and was very frustrated that my buy order was just a tad low, the stock dipped below $17 bucks (CDN FR.TO) only quickly before snapping back up to mid 17s before closing at 18, when Silver lost over 3% I anticipated at least 4% drop in Silver miners especially FR/AG as it normally does but they didn't... wtf?? 

Also I trade on the TSX and noticed a few days ago FR.TO had a massive 330,000 vol spike during its run up from 16-17 bucks... is that normal?  Not sure where you can see this but I'm pretty sure that 330,000 shares was done in a span of just a few minutes if not in a few seconds...

I'm really hoping the miners haven't started to take off and diverge from Silver spot US$ completely, was hoping they continue to act as leveraged plays so I can keep on BTFD and sell on rallies throughout the 'summer doldrums'

Streetside
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More on First Majestic price action this past week

I have been scouring message boards for explanations of the price action of First Majestic Silver on Tuesday and especially on Thursday. The most convincing explanation I found cited the likelihood of (a) short covering, (b) low volumes which accentuate the upward price movement due to any buying (c) the fact that mining shares are not always in lockstep with spot bullion prices, and (d) new analyst coverage and buy recommendations which have established that now is the time to buy.

I'd be curious to hear what Turdites think of this rationale?

JoeyJoeJoe
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Re: Streetside

Your reasons pretty much sums it up.  Maybe add fund managers repurchasing their positions in time for the end of June reporting to that list.  There were spikes in volumes for many, many miners these past couple of weeks.

Warren Peace
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Stupid cheap!

All the high quality, non-leveraged silver (and gold) stocks are trading as if gold was $800, and silver at $18. These are the worse valuations since the 2008 mega crush. Everyone is frustrated with the non-performance of these stocks, and no one is excited about them..... yet.

A contrarian play just doesn't get any better than this. The fundamentals and valuations are out of sight, and no one is interested. It's the best time to build up positions in these stocks. Hathaway thinks there may be some government sponsored algorithm at work to make the anti-dollar metal stocks look dismal. But they cannot hide the EPS from wise investors forever. And as these miners start to pay dividends, the prospect of keeping large shorts in place becomes more daunting. Short term they may languish, but by next year they should be way, way higher to reflect their earnings. So to play it safe just accumulate the shares. If you must have leverage, then buy the options out to Jan 2012 at least. Roll out, and into further dated options on a strong move up with plenty of time left. The best part is you will avoid all the uncertainty that comes from holding paper comex contracts that have close to zero physical backing. Physical is what these miners are pulling out of the ground. And dividends in our future...... so SWEET!

Streetside
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Thanks

Thanks, Joey. I hadn't considered quarter end action of fund managers. Makes sense.

SushiSioux
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2Q2011 looking good

http://www.firstmajestic.com/s/NewsReleases.asp?ReportID=465792&_Type=News-Releases&_Title=Another-Record-Quarter-of-Silver-Production

Highlights

  • Silver production increases by 16% to a quarterly record of 1,780,379 ounces
  • Silver ounces amount to 97% of total equivalent silver production of 1,843,830 ounces
  • Total processed ore in the quarter increased by 6% to a record 482,075 tonnes

First Majestic Silver Corp. ("First Majestic" or the "Company") is pleased to announce that production in the second quarter of 2011 reached 1,843,830 equivalent ounces of silver, representing an 11% increase over the 1,656,165 equivalent ounces of silver produced in the second quarter of 2010. Production during the quarter consisted of 1,780,379 ounces of silver, making First Majestic's second quarter production 97% pure silver, the highest in the silver mining industry.

Silver production in the second quarter of 2011 represents a 16% increase compared to the second quarter of the prior year of 1,538,798 ounces, and a 1% increase over the 1,769,208 silver ounces produced in the first quarter of 2011. In addition to the 1,780,379 ounces of pure silver, the Company produced 1,392,132 pounds of lead, representing a 7% decrease from the second quarter of the previous year, and 337 ounces of gold, representing a decrease of 38% compared to the second quarter of 2010.

Company guidance for 2011 released on January 11, 2011 stated, "Silver Production is anticipated to exceed 7.5 million ounces of silver in 2011". Results of the second quarter are within this guidance. As previously announced, the increasing production for the balance of the year will be achieved once the two-stage mill expansion project at La Parrilla begins to come on-line over the next three quarters. Firstly, the expanded flotation circuit is expected to reach 800 tpd during the third quarter compared to the current rate of 425 tpd. Secondly, the expanded cyanidation circuit is anticipated to reach 800 tpd, up from the current 425 tpd, within the first quarter of 2012.

ghost
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This is a beast of a silver

This is a beast of a silver company/stock.  Is there a more popular silver miner with a huge upside pull every day on the market presently (+24% from June low)?  Surprised it's not getting much talk on this board. 

Nemesis
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2011 SECOND QUARTER HIGHLIGHTS

From http://www.firstmajestic.com:

  • Cash Flow per share (non-GAAP) of $0.37 representing a 199% increase from Q2 2010
  • Earnings per share (basic) amounted to $0.30 representing a 150% from Q2 2010
  • Gross Revenue of $68 million showing a 148% increase from Q2 2010
  • Net Earnings after Taxes amounted to $30.6 million, a 179% increase from Q2 2010
  • Mine Operating Earnings of $46.8 million showing an increase of 270% from Q2 2010
  • Total Cash Cost were US$8.32 per ounce, up 7% compared to Q2 2010
  • Silver ounces produced increases by 16% to 1,780,379 compared to 1,538,798 ounces in Q2 2010
  • 2011 production guidance remains unchanged at 8.0 million ounces of silver equivalent
  • Fully un-hedged to silver prices as treasury exceeds $105 million
Nemesis
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new presentation

http://www.firstmajestic.com/i/pdf/FR-PPT-Oct2011.pdf

Nemesis
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conference call: It is worth your time

Keith Neumeyer tells his view about:

the future silver price

project pipeline

plans to pay a dividend

aquististions

resource update

recovery rates

....

regards
--------

[1] https://services.choruscall.com/links/fm111011.html

Nemesis
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Keith Neumeyer: The Silver Market Lacks Integrity

http://seekingalpha.com/article/310210-keith-neumeyer-the-silver-market-lacks-integrity?source=yahoo#comments_header

T
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I like AG

First majestic is a favorite of mine, but  it seemed to shine much better last year and early this year.... other miners have been 'performing' better (stock price wise) this summer, during the silver slam down summer..... stocks like Fortuna Silver and Scorpio mining  have looked and held up  'better' but otherwise.... I like to buy more First Majestic if it falls further down towards 12/11/10 area again.....and if spot silver correlates and falls down below 30 at the same time....  

There was great shining luster in these miners that went soaring last year and few soared higher that First majestic......  and this year, they have been falling and falling and stumbling and sliding and leaning against the ropes, and buckling at the knees, and holding up but falling still.....and now we're well along into the "strong season for metals and miners" and  the shining luster   is still  dull  and listing along in limbo.

The best I can think to do is sit and watch and wait to see these good miners....hit a visible technical bottom and maybe buy some more at the lows.....First Majestic target would be 10 area/11/12 area

Fortuna silver would be below 5 and closer to 4.

Scorpio Mining would be 1.20-1.50 area

SVM  7 to 6

SLW   below 30

Franco Nevada .... below  ?? 36  ?

OptionsMan
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Interview with First Majestic

There is a new interview with the CEO of First Majestic at financialsense.com for those who are interested.

ferretflat
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AG up 10% today in a flat market.

Can anyone tell me why AG is up 10% today when silver is flat? On a 10% up day I reflexively sell but I like to know why.

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