Why First Majestic Silver Corp. Might Keep Losing its Luster
While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of First Majestic Silver slipped about 0.5% in pre-market trading Thursday after TD Securities downgraded the silver explorer from buy to hold.
So what: Along with the downgrade, analyst Daniel Earle reiterated his price target of C$15.50, representing about 24% worth of upside to yesterday's close. While contrarians might be attracted to yesterday's earnings-related pullback, Earle thinks First Majestic's forward valuation is no longer all that attractive relative to other silver miners.
Now what: According to TD, First Majestic's risk/reward trade-off is pretty balanced at this point. "Q4/13 cash costs were slightly higher than we had anticipated, while capital expenditures were in line," noted Earle. "With the company expected to generate negative free cash flow in 2014 and as it is now trading in line with its peers on our estimates, we are downgrading our recommendation to HOLD (from Buy)." Of course, with First Majestic still off about 30% from its 52-week high, that bearishness might provide resource-savvy Fools with a shiny long-term opportunity.
More reliable ways to build wealth
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.
The article Why First Majestic Silver Corp. Might Keep Losing its Luster originally appeared on Fool.com.Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.