Shares of SSR Mining (NASDAQ:SSRM) rose roughly 11% in early trading on May 6, and at roughly 2 p.m. EDT, they were still holding on to most of that gain. The company’s premarket earnings release was one important factor, but commodity markets were accommodating as well.
SSR Mining produces gold, silver, lead, and zinc. The two precious metals are the main drivers of top- and bottom-line performance, but all of the materials are commodities — which is notable in a couple of ways today. For starters, both gold and silver prices were on the rise, which generally leads to increasing stock prices for miners (miners are leveraged to such price movements). So the price advance today had a bit of tailwind from the commodity markets.
That said, SSR Mining also reported earnings. Its realized prices for gold and silver in the first quarter of 2021 were higher by 12.5% and a whopping 49%, respectively, compared to the same period in 2020. That helped to boost adjusted earnings from $0.19 per share in the first quarter last year to $0.47 this year. Add in solid production numbers and declining production costs, on the operational front, and the story gets even better. All in, it makes sense that investors were upbeat here today.
Long-term investors shouldn’t read too much into one day’s worth of trading, particularly for a precious metals company like SSR Mining. Gold and silver stocks tend to be fairly volatile. While there’s no question that the earnings results were pretty good here, it’s still probably best for investors to think of precious metals stocks as diversification tools. Trying to time the short-term ups and downs of gold and silver, and the companies that mine for them, is a venture best left to far more aggressive investors.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.