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A Spotlight On Silvercorp Metals Inc.'s (TSE:SVM) Fundamentals

Simply Wall St

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Attractive stocks have exceptional fundamentals. In the case of Silvercorp Metals Inc. (TSE:SVM), there's is a company that has been able to sustain great financial health, trading at an attractive share price. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Silvercorp Metals here.

Excellent balance sheet and good value

SVM's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that SVM manages its cash and cost levels well, which is a crucial insight into the health of the company. SVM seems to have put its debt to good use, generating operating cash levels of 15.14x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows. SVM's shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. Investors have the opportunity to buy into the stock to reap capital gains, if SVM's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the metals and mining industry, SVM is also trading below its peers, relative to earnings generated. This further reaffirms that SVM is potentially undervalued.

TSX:SVM Intrinsic value, May 29th 2019

Next Steps:

For Silvercorp Metals, I've put together three fundamental factors you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for SVM’s future growth? Take a look at our free research report of analyst consensus for SVM’s outlook.
  2. Historical Performance: What has SVM's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SVM? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.