Fresnillo Shares Sinking Despite CEO’s Best Efforts

The Wall Street Journal reported that although Fresnillo plc (LSE:FRES) is “responding sensibly” to the fall in silver prices, shares in the company have nevertheless fallen 50 percent this year — that includes an 11-percent decline following the news that the miner’s net profit fell 61 percent during the first half of 2013.

As quoted in the market news:

But [CEO Octavio] Alvidrez can’t do much about the revenue side of Fresnillo’s margin equation. With financial investors losing faith in precious metals, the sudden peak in silver seen from late 2010 is starting to look like an aberration: Before then, the metal hadn’t traded above its current $19-an-ounce level. Yet Fresnillo’s valuation at 2.6 times book value and 26.4 times expected 2014 earnings, according to Liberum Capital, still seems to imply substantial profit growth. Fresnillo may stand out from other miners—but in the current climate, its price still looks too shiny.

Click here to read the full report from The Wall Street Journal.