October 17, 2008

Coeur D'Alene Mines: Oversold?

The Fool published an article on the 16th regarding Coeur D'Alene mines, a silver miner who has corporate offices in Coeur D'Alene, Idaho. CDE stated on Monday that they expected a 3rd quarter loss of $.01 cents per share mainly due to falling silver prices and increased costs primarily associated with readying a new silver mine in Bolivia for production.

With the stock price at a new 52 week low, this could prove to be an excellent time to invest in this company provided that the management team can contain costs. According to this article, CDE has already begun to lay off workers at their mine in Alaska. They have also stated that once prodcuction has begun at the Bolivia mine, startup costs will be reduced significantly.

One other factor to keep in mind is that this is a small cap stock that may be highly tied to sentiment of the market. If you invest, prepare for a roller coaster ride as the price of CDE may ebb and flow with the overall market. I would agree with the Fool author in stating that the stock has been oversold. What is a fair price for a company that reports a $.01 per share loss? It is difficult to say, but a new 52 week low in the stock price with increased production on the way doesn't seem justified.

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