A very poor, amateur hack job. To begin with, this information was released when HL released it's earnings last Thursday. The MF write-up has no new informational content. Second, the guy makes it sound like they'll end up spending all of their cash to settle this. Wrong. The terms of what looks like will likely be close to the final settlement are clearly delineated in HL's earnings release. They'll have to use a little over $100mm up front and then use cash plus the exercise of warrants plus stock in amortizing payments out to 2014. For a company generating a run-rate of over $50mm cash flow/quarter with silver at $30, I'm not too worried about HL's ability to fund everything out of operations plus cash on hand.It took me all of about 5 minutes to pour thru HL's earnings release and figure out what was going on. I'm sure I could justify a stock price of $22 for Hecla if I wanted to take the time to do a very thorough analysis of the latest 10K/Q plus spent 30 minutes on the phone with management. I don't have time for that and I know HL is going to more than double from here eventually. I took advantage of this market inefficiency (i.e. crap analysis) and doubled my position in the stock, as I was looking to put more stock on anyway!
Quite frankly I'm getting quite irritated by the all the amatuer, hack analysis on the precious metals and mining stock market that gets widely published. Before I saw this MF train wreck analysis, I had mentioned to a long time colleague that I was getting really irritated by all the ignorance about this sector proliferating in the media and interenet. The Motley Fool has proven time and again that they know as much about this sector as Ellen DeGeneres knows about the NFL.
This hit is a gift from the market. Enjoy it.
Monday, February 28, 2011
The Motley Fool website posted a critical analysis of Hecla Mining (HL) today that is being credited for knocking 5% off the price of the stock. Here's the piece: GARBAGE I felt compelled to post a response on the Yahoo/finance HL chatboard, even though trolling these types of venues is typically beneath me. I did feel the need to clarify and post the golden truth. Here's is what I wrote:
Posted by Dave in Denver at 11:51 AM