TSX:LGO

Stock Analysis Report

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Executive Summary

Largo Resources Ltd., a natural resource company, engages in the acquisition, exploration, development, and operation of mining and exploration properties in Brazil and Canada. More Details


Snowflake Analysis

Exceptional growth potential with adequate balance sheet.

Share Price & News

How has Largo Resources's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LGO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.0%

LGO

-0.9%

CA Metals and Mining

-1.0%

CA Market


1 Year Return

-28.6%

LGO

54.1%

CA Metals and Mining

-4.3%

CA Market

Return vs Industry: LGO underperformed the Canadian Metals and Mining industry which returned 54.2% over the past year.

Return vs Market: LGO underperformed the Canadian Market which returned -4.2% over the past year.


Shareholder returns

LGOIndustryMarket
7 Day1.0%-0.9%-1.0%
30 Day-1.0%-1.2%1.3%
90 Day-4.8%-1.2%1.9%
1 Year-28.6%-28.6%55.3%54.1%-0.9%-4.3%
3 Year16.3%16.3%58.2%55.1%6.4%-4.0%
5 Year300.0%300.0%151.2%143.4%33.3%12.8%

Price Volatility Vs. Market

How volatile is Largo Resources's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Largo Resources undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LGO (CA$1) is trading below our estimate of fair value (CA$3.25)

Significantly Below Fair Value: LGO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: LGO is unprofitable, so we can't compare its PE Ratio to the CA Metals and Mining industry average.

PE vs Market: LGO is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate LGO's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: LGO is good value based on its PB Ratio (1.9x) compared to the CA Metals and Mining industry average (2.8x).


Next Steps

Future Growth

How is Largo Resources forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

111.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LGO is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: LGO is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: LGO's is expected to become profitable in the next 3 years.

Revenue vs Market: LGO's revenue (30.4% per year) is forecast to grow faster than the Canadian market (5.8% per year).

High Growth Revenue: LGO's revenue (30.4% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LGO's Return on Equity is forecast to be high in 3 years time (27.8%)


Next Steps

Past Performance

How has Largo Resources performed over the past 5 years?

49.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LGO is currently unprofitable.

Growing Profit Margin: LGO is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: LGO is unprofitable, but has reduced losses over the past 5 years at a rate of 49.6% per year.

Accelerating Growth: Unable to compare LGO's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: LGO is unprofitable, making it difficult to compare its past year earnings growth to the Metals and Mining industry (78.5%).


Return on Equity

High ROE: LGO has a negative Return on Equity (-5.62%), as it is currently unprofitable.


Next Steps

Financial Health

How is Largo Resources's financial position?


Financial Position Analysis

Short Term Liabilities: LGO's short term assets ($119.8M) exceed its short term liabilities ($39.1M).

Long Term Liabilities: LGO's short term assets ($119.8M) exceed its long term liabilities ($5.9M).


Debt to Equity History and Analysis

Debt Level: LGO's debt to equity ratio (11.1%) is considered satisfactory.

Reducing Debt: LGO's debt to equity ratio has reduced from 172.9% to 11.1% over the past 5 years.

Debt Coverage: LGO's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: LGO is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet


Next Steps

Dividend

What is Largo Resources's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate LGO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate LGO's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if LGO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if LGO's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of LGO's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.8yrs

Average management tenure


CEO

Paulo Misk (57 yo)

1.08yrs

Tenure

US$1,284,915

Compensation

Mr. Paulo Guimarães Misk serves as Chief Executive Officer and Director of Largo Resources Ltd. since September 8, 2019. Mr. Misk is the President of Largo Resources Ltd. since October 2018 and served as i ...


CEO Compensation Analysis

Compensation vs Market: Paulo's total compensation ($USD754.34K) is about average for companies of similar size in the Canadian market ($USD838.38K).

Compensation vs Earnings: Paulo's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Paulo Misk
President1.08yrsUS$1.28m0.13%
$ 713.0k
Ernest Cleave
Chief Financial Officer7.08yrsUS$1.00m0.042%
$ 236.1k
Alvaro Jose Do Resende
Production Directorno dataUS$391.34kno data
David Harris
Corporate Controllerno dataUS$540.10kno data
Nilson Chaves
Vice President of Finance & Administration - Brazil4.5yrsUS$798.84k0.057%
$ 320.9k
Alex Guthrie
Manager of Investor Relations & Communicationsno datano datano data
Paul Vollant
Director of Sales & Trading1.08yrsno datano data
Francesco D'Alessio
Head of Sales - Americas1yrno datano data
Kurt Menchen
13.58yrsUS$792.19kno data

2.8yrs

Average Tenure

54yo

Average Age

Experienced Management: LGO's management team is considered experienced (2.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Paulo Misk
President1.08yrsUS$1.28m0.13%
$ 713.0k
David Brace
Independent Director8.33yrsUS$172.00k0.057%
$ 323.7k
Jesus Alberto Arias
Independent Non-Executive Chairman1.08yrsUS$196.38k0.017%
$ 98.0k
Daniel Tellechea
Independent Director5.25yrsUS$192.63kno data
Koko Yamamoto
Independent Director5.25yrsUS$230.93kno data
Jonathan Lee
Independent Director1.5yrsUS$29.61kno data

3.4yrs

Average Tenure

55yo

Average Age

Experienced Board: LGO's board of directors are considered experienced (3.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 6%.


Top Shareholders

Company Information

Largo Resources Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Largo Resources Ltd.
  • Ticker: LGO
  • Exchange: TSX
  • Founded: 1988
  • Industry: Diversified Metals and Mining
  • Sector: Materials
  • Market Cap: CA$563.781m
  • Shares outstanding: 563.78m
  • Website: https://www.largoresources.com

Number of Employees


Location

  • Largo Resources Ltd.
  • 55 University Avenue
  • Suite 1105
  • Toronto
  • Ontario
  • M5J 2H7
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LGOTSX (The Toronto Stock Exchange)YesCommon SharesCACADMar 1990
LR81DB (Deutsche Boerse AG)YesCommon SharesDEEURMar 1990
LGOR.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDMar 1990

Biography

Largo Resources Ltd., a natural resource company, engages in the acquisition, exploration, development, and operation of mining and exploration properties in Brazil and Canada. It primarily explores for va ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/22 01:11
End of Day Share Price2020/10/21 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.