Why Gold Resources Shares Plunged
Jul 20th 2012 1:27PM
Updated Jul 20th 2012 4:34PM
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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