Why Gold Resources Shares Plunged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Gold Resources Corp. (NYS: GORO) fell 25% today after the company lowered its production guidance.

So what: On Thursday after the close, the company said it produced about 14,500 ounces of gold, below its own estimates. The company also lowered its 2012 production guidance by 15% to 100,000-120,000 ounces.

Now what: Lower production will have a big impact on profitability this year, so the drop is understandable. The company hasn't released earnings yet, so we'll get a better picture when the company releases final, second-quarter results. Until then I would stay away, looking for a clearer picture at that time.

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The article Why Gold Resources Shares Plunged originally appeared on Fool.com.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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