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Is Fortuna Silver Mines (FSM) a Great Value Stock Right Now?

Zacks Equity Research

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is Fortuna Silver Mines (FSM). FSM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 9.39 right now. For comparison, its industry sports an average P/E of 20.88. FSM's Forward P/E has been as high as 25.45 and as low as 7.72, with a median of 13.76, all within the past year.

We should also highlight that FSM has a P/B ratio of 0.81. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. FSM's current P/B looks attractive when compared to its industry's average P/B of 1.37. Over the past 12 months, FSM's P/B has been as high as 1.13 and as low as 0.63, with a median of 0.91.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. FSM has a P/S ratio of 2.07. This compares to its industry's average P/S of 2.56.

These are just a handful of the figures considered in Fortuna Silver Mines's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that FSM is an impressive value stock right now.

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