As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Fortuna Silver Mines Inc (TSE:FVI), it is a financially-healthy company with a a strong track record of performance, trading at a great value. In the following section, I expand a bit more on these key aspects. If you’re interested in understanding beyond my high-level commentary, read the full report on Fortuna Silver Mines here.
Undervalued with solid track record
Over the past year, FVI has grown its earnings by 80%, with its most recent figure exceeding its annual average over the past five years. Not only did FVI outperformed its past performance, its growth also exceeded the Metals and Mining industry expansion, which generated a 42% earnings growth. This paints a buoyant picture for the company. FVI’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that FVI manages its cash and cost levels well, which is a key determinant of the company’s health. FVI seems to have put its debt to good use, generating operating cash levels of 2.31x 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.
FVI’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 FVI’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Also, relative to the rest of its peers with similar levels of earnings, FVI’s share price is trading below the group’s average. This bolsters the proposition that FVI’s price is currently discounted.
For Fortuna Silver Mines, there are three pertinent aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for FVI’s future growth? Take a look at our free research report of analyst consensus for FVI’s outlook.
- Dividend Income vs Capital Gains: Does FVI return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from FVI as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of FVI? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.