Hecla Mining (HL) Stock Jumps 16.6%: Will It Continue to Soar?
Hecla Mining (HL) shares soared 16.6% in the last trading session to close at $7.29. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 4.2% gain over the past four weeks.
Shares of Hecla Mining surged following its stellar first-quarter 2021 results. Raising the silver-linked portion of its dividend by 1 cent per year also contributed to the upsurge. In the quarter, revenues increased 54% year over year to $210.9 million — the second-highest quarterly revenue in the company’s 130 years history. This was driven by higher metal prices and production of silver, lead, and zinc. Adjusted EBITDA was record $86.1 million, reflecting a 145% growth year over year primarily due to higher sales partially. The company reported earnings per share of 6 cents, a turnaround from a loss of 3 cents per share in the prior-year quarter.
Hecla also announced that its board has increasing the silver-linked dividend by 1 cent per share for each $5 increase in the quarterly average realized silver price per ounce above the threshold price of $25 per ounce. This dividend policy allows investors to participate in gains realized when silver prices increase.
The company added that the current backdrop for silver remains positive on the back of improving industrial demand. The metal will gain on global policies that support green energy where silver is a key component, strong investment demand and tight supply. Hecla is poised to gain from this as it is the United States' largest silver producer, mining more than a third of its production. This is expected to go up to 15 million ounces by 2023 with the Lucky Friday's silver production expected to increase to 5 million ounces.
Price and Consensus
This precious metals company is expected to post quarterly earnings of $0.05 per share in its upcoming report, which represents a year-over-year change of +266.7%. Revenues are expected to be $211.07 million, up 54.1% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Hecla Mining, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on HL going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
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