Is Fortuna Silver Mines (FSM) Stock Undervalued Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.49, which compares to its industry's average of 19.80. Over the last 12 months, FSM's Forward P/E has been as high as 27.89 and as low as 4.18, with a median of 10.54.
Another valuation metric that we should highlight is FSM's P/B ratio of 0.75. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.04. FSM's P/B has been as high as 0.94 and as low as 0.42, with a median of 0.73, over the past year.
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 1.43. This compares to its industry's average P/S of 2.2.
Finally, investors should note that FSM has a P/CF ratio of 28.06. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. FSM's current P/CF looks attractive when compared to its industry's average P/CF of 66.81. FSM's P/CF has been as high as 34.12 and as low as 2.98, with a median of 5.22, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Fortuna Silver Mines is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, FSM feels like a great value stock at the moment.
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Fortuna Silver Mines Inc. (FSM) : Free Stock Analysis Report
