Hecla Mining Company’s (NYSE:HL): Hecla Mining Company, together with its subsidiaries, discovers, acquires, develops, and produces precious and base metal deposits worldwide. On 31 December 2017, the US$1.54B market-cap posted a loss of -US$24.07M for its most recent financial year. As path to profitability is the topic on HL’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for HL, its year of breakeven and its implied growth rate.See our latest analysis for Hecla Mining
According to the industry analysts covering HL, breakeven is near. They expect the company to post a final loss in 2018, before turning a profit of US$60.08M in 2019. So, HL is predicted to breakeven approximately a couple of months from now! What rate will HL have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 100.35%, which is extremely buoyant. If this rate turns out to be too aggressive, HL may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for HL given that this is a high-level summary, though, take into account that by and large metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing I’d like to point out is that HL has managed its capital judiciously, with debt making up 34.64% of equity. This means that HL has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on HL, so if you are interested in understanding the company at a deeper level, take a look at HL’s company page on Simply Wall St. I’ve also put together a list of essential aspects you should look at:
- Valuation: What is HL worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether HL is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Hecla Mining’s board and the CEO’s back ground.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.