Silver futures for the December delivery dropped nearly 5% to $15.635, their lowest price since February 2010, according to Bloomberg.
The decline occurred thanks in part to the Bank of Japan, which helped strengthen the U.S. dollar when it bolstered its stimulus by increasing its annual target for enlarging the monetary base to 80 trillion yen, or $723 billion, up from a range of 60 to 70 trillion yen. The move sent the yen to a six-year low against the dollar.
Separately, TheStreet Ratings team rates FIRST MAJESTIC SILVER CORP as a "hold" with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate FIRST MAJESTIC SILVER CORP (AG) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 0.7%. Since the same quarter one year prior, revenues rose by 38.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- AG's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.22, which illustrates the ability to avoid short-term cash problems.
- 36.16% is the gross profit margin for FIRST MAJESTIC SILVER CORP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 11.34% trails the industry average.
- This stock's share value has moved by only 42.08% over the past year. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, FIRST MAJESTIC SILVER CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: AG Ratings Report