I expect Helca Mining to shine during the 4th quarter of this year and the 1st of next year.
HL = Hecla Mining
I expect HL to shine near continuously now that the EPA litigation consent decree has been filed (and the penalty payments already accounted for in the 1st quarter already past). Lots of shorts to be covering in the coming weeks and months.
Their free cash flow is astounding (over 33% conversion rate from revenues), and their cost of silver out of the ground is incredibly low (2nd lowest anywhere on earth, I believe).
disclosure: I own a lot of it.
HL is a real tough bastard. You will go insane investing in it. But it can make you some serious fiat. For starters, it has the lowest cost silver mines in North America. In fact, with base metal byproducts (lead and zinc) they have negative mining prices for silver. Mines are at Lucky Friday in Idaho and Greens Creek in Alaska. The latter mine nearly bankrupted the company. HL bought Green's Creek for a high price and financing its purchase was (along with the crash of 2008) responsible for HL falling to a buck in '08. But the financing is wrapped up. And Green's Creek should be a constant revenue source as well as a never-ending source of new silver. So you have two mines located in the good ol' USA.
HL problem has always been its management. Take the recent settlement with the EPA. HL had years YEARS to settle this environmental disaster. They had numerous friendly Republican administrations to cut a deal with. CDE, for example, settled the same complaint fifteen or so years ago. Instead, HL chose to settle with the most liberal administration since Jimmy Carter. Apparently in Idaho, they actually believed John McCain was soaring toward a glorious victory! HL's CEO Baker was forced to settle with the Obama EPA for 263 million. Now that's a lot of silver eagles. Furthermore, HL's insiders/management routinely dump the stock, take a ridiculous preferred dividend and routinely say stupid things about the future price of silver.
In the last six months, HL has blown the EPA settlement, postponed their earnings announcement like a two-bit Chinese penny stock and had a mine explosion in their Lucky Friday mine (killing one miner). With management like this, no wonder there are 24.9 millions shares short the company with 9% of the float and 3 days to cover. HL simply has a chronic, unending, controlling short side that acts like a boot on the company's throat.
Personally, I find management's most gross malfeasance to be its failure to speak out against the manipulative forces of its shares and of the metal it mines. Baker, as far as I know, has never railed against the EE that for years has shorted its company's stock. Not one peep.
HL was my largest portfolio holding for over a year. I had more than 20,000 shares. Today, I have less than five thousand. EXK, SLW and the littler guys like GPL and JAG have proven more attractive investments. The reason is simple, the great mines withstanding, HL management never ceases to screw up and screw over their shareholders.
I will buy HL in a heartbeat. At seven bucks, it is undervalued. Today, at 7.29, you have to be vigilant; if HL drops below 7.20 the HL shorts will take it to 7.00 and if 7 fails, to 6.79. The short interest sends it children to college, stocks its wine cellars with super Tuscans, and drives BMW's off the small retail HL investor throwing in the towel and selling, exasperated, with huge losses. In sum, HL is a silver miner for sado-masochists.
Hey CF - you beat me here!! To everyone else, I own a shitload of HL, and if you don't understand HL, it WILL drive you nuts.
My successful strategy is to buy on dips, and HOLD.
At $7.30 HL is a screaming buy - no debt, legal problems resolved, nothing but blue sky here.
Buy it at $7.30 with confidence, and wait 18 months - you will be richly rewarded. In other words: Treat HL like your Physical Silver - stash it away, and hold it tight.
DON'T, however, look at the day-to-day and week-to-week fluctuations!! The stock is heavily manipulated, with a LOT of short shares outstanding. Basically, there is now no place for the shorts to go - they won't be able to push physical Silver under $30 an oz, and HL is a stone Cash Cow at that level.
I expect a good amount of "sideways action" up till August or so, but feel come December we'll be looking at $12+ per share.
hecla, paas have had the muy bearish 50 day moving avg cross the 200, and that does nor bode well for holders, but does for those wanting to add or build new positions.....waitin patiently for under 6
And don't read the Yahoo! Message board for Hecla everyday. Wow. Lots of negative nellies over there. LOL.
I don't have any shares anymore, but I would like to buy at this price.
I do have some call options strike 12.5 jan 2013 left. Sure hope they will not expire worthless.
I earned some money on my previous options, but this sure is a stock that can drive one nuts.
I like to see a run again in the fourth quarter like last year. Maybe I buy some option jan 2012 strike 7.5 if the shorts get it even lower then it is today.
So today, HL isn't invited to the party. So you gotta buy. I may maunder here for a couple days underperforming. But sure enough, it will pop and find itself on the Kitco best performer miner list. That's when you sell. Holding anything more than a core position of HL is dumb. Not with its tendency to sleep through big days and pop suddenly on others. I justy bought today at 8.13. Now I'll just sit back and wait for the 20-40 cent pop.
HL reports tomorrow. You have to, by default, expect HL to miss or meet. THey never beat. GOing forward, they should show increased production (which they probably won't meet). At 7.20 a share, any miss is pretty much built-in at this point. Do I buy in anticipation? Yes, but just a nibble or two.
Only one event can really take HL back the double digits: a dividend. Were that to happen, I would kiss Baker on the cheek.
ANd they miss. BY three cents. This is the worst run mining company in the business. HL was a $12 stock in 2008. Today, a symbolic 6.66.
They missed revs. They missed production. They increased cost per ounce. They hedged the base metals to the wrong side. They saw labor costs rise-- and I want to puke just typing this--due to "higher labor costs due primarily to higher fringe benefits costs."
Fringe benefit costs? What, are they flying in hookers to Green's Creek? Is Bono playing for the guys in Idaho? Fringe benefits during one of the worst bouts of unemployment since the Depression. Fringe benefits? Fringe fucking benefits for a company that misses earnings repeatedly and just settled a bazillion dollar settlement with the EPA (when they could have settled decades ago like CDE under the first fucking Bush administration).
HL has gone from my number one holding to a sliver in the portfolio. I now short it more than hold long. To call it a green, gelatinous, oozing turd is an insult to our dear leader here.
Until shareholder scream out for Baker's head, nothing changes. I will increase my shorts at every opportunity. What a piece of shit.
End of rant.
...is my understanding on HL. Look for it to rocket if the whole EE manipulation thing starts to come apart.
HL should be about $15-20 imo easily with silver at these prices.
People hate HL because the stock has not performed, but if one crunches the numbers here with 43oz silver, this stock is a gift here. I did not get mad, I bought OTM Jan. call options.
The person who said they were going to short HL now, good luck with that plan, don't let your emotions rule your investments, HL is going so much higher, higher than most think is my bet.
From Aug. 15 through 17, Hecla President and Chief Executive Phillips S. Baker Jr. bought 33,000 shares for $242,880, an average of $7.36 each.
The world has become a very strange place indeed. Apparently cash is also a position, and Baker just chose to reduce his exposure to that position.
I held a position with HL a few years back until it started to decline this last year and Baker sold some of his shares. I have since returned to HL and taken a position since Baker bought recently. I do expect HL's share price to benefit from the autumn buying season.
There was a meeting with JPM and Baker late last year. Does anyone have any idea or heard any useful info on the outcome. TIA
BTW - I also own SVM the lowest cost producer followed by HL in the industry
Good on Hecla, i was hoping SVM and a few others would instill a silver based dividend, so investors can enjoy the increase in the metal value . And fight the shorts of course.
Here's to hoping this becomes a trend.
Indeed mouser. This makes me so pumped now.