Stock Analysis

Santacruz Silver Mining (CVE:SCZ) swells 32% this week, taking three-year gains to 427%

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For us, stock picking is in large part the hunt for the truly magnificent stocks. You won't get it right every time, but when you do, the returns can be truly splendid. For example, the Santacruz Silver Mining Ltd. (CVE:SCZ) share price is up a whopping 427% in the last three years, a handsome return for long term holders. Better yet, the share price has risen 32% in the last week.

The past week has proven to be lucrative for Santacruz Silver Mining investors, so let's see if fundamentals drove the company's three-year performance.

Check out our latest analysis for Santacruz Silver Mining

Santacruz Silver Mining isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last 3 years Santacruz Silver Mining saw its revenue grow at 95% per year. That's well above most pre-profit companies. In light of this attractive revenue growth, it seems somewhat appropriate that the share price has been rocketing, boasting a gain of 74% per year, over the same period. It's always tempting to take profits after a share price gain like that, but high-growth companies like Santacruz Silver Mining can sometimes sustain strong growth for many years. So we'd recommend you take a closer look at this one, or even put it on your watchlist.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

TSXV:SCZ Earnings and Revenue Growth March 17th 2023

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free interactive report on Santacruz Silver Mining's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

While it's never nice to take a loss, Santacruz Silver Mining shareholders can take comfort that their trailing twelve month loss of 3.7% wasn't as bad as the market loss of around 8.4%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 21% for each year. It could be that the business is just facing some short term problems, but shareholders should keep a close eye on the fundamentals. It's always interesting to track share price performance over the longer term. But to understand Santacruz Silver Mining better, we need to consider many other factors. Take risks, for example - Santacruz Silver Mining has 2 warning signs we think you should be aware of.

Santacruz Silver Mining is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Canadian exchanges.

Valuation is complex, but we're helping make it simple.

Find out whether Santacruz Silver Mining is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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