Why Silvercrest Mines (SVLC) Is Down Today

NEW YORK (TheStreet) -- Silvercrest Mines  (SVLC) declined 10.88% to $1.82 at 1:45 p.m. on Monday after the company reported fourth-quarter results that came up short of analysts' expectations.

The company reported fourth-quarter net loss of 4 cents a share, 8 cents off of the Capital IQ consensus estimate of earnings of 4 cents a share. Revenue also declined 26% year over year to $13.6 million, short of the consensus estimate of $14.2 million.

For the fiscal year 2014, the company said in a statement it plans to focus on continuing operations at its Santa Elena mine and to expand it with the construction of a new conventional mill facility, with initial underground production in 2014. The company also wants to evaluate and acquire properties near Santa Elena.

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TheStreet Ratings team rates SILVERCREST MINES INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate SILVERCREST MINES INC (SVLC) 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 notable return on equity, good cash flow from operations and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • In comparison to the other companies in the Metals & Mining industry and the overall market, SILVERCREST MINES INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • SVLC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.60, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for SILVERCREST MINES INC is rather high; currently it is at 61.27%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, SVLC's net profit margin of 27.11% significantly outperformed against the industry.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Metals & Mining industry average, but is greater than that of the S&P 500. The net income increased by 193.2% when compared to the same quarter one year prior, rising from $1.26 million to $3.71 million.
  • SVLC has underperformed the S&P 500 Index, declining 17.34% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • You can view the full analysis from the report here: SVLC Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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