Raymond James Defends Silvercorp (SVM) Amid Fraud Allegations; Calls Claims 'Unfortunate and Opportunistic'

Following a nearly 20 percent decline Tuesday amid attacks from a number of known short research firms, shares of Silvercorp Metals (NYSE: SVM) were modestly higher in pre-market action Wednesday morning. Following the opening bell, however, the stock pared gains and is now down about 2.2 percent to $6.16.

Traders may be responding to a Raymond James note from earlier which defends Silvercorp. The firm's Brad Humphrey argues recent allegations of fraud provide an "unfortunate and opportunistic" chance to get into the stock.

The analyst insists Silvercorp's SGX mine in the Ying property "is a high quality asset that should generate positive returns at current and much lower metal prices for many years to come." Amid the fraud claims, Humphrey believes the discussion boils down "to the fact that since 2004 the company has raised just over $200 mln, paid some $40 mln in dividends, ~$30 mln in share buybacks, spent more than $175 mln acquiring, developing, expanding and exploring (both in China and Canada) and still have roughly $220 mln in the bank."

Humphrey said he expects Silvercorp to "weather this storm."

Raymond James reiterates an Outperform rating and $16 price target on shares of Silvercorp.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• RBC Capital Downgrades Range Resources (RRC) to Sector Perform
• JPMorgan Downgrades Boyd Gaming (BYD) to Neutral
• Sysco Corp. (SYY) Raises Quarterly Dividend 2% to $0.51; 2.6% Yield