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Is Fortuna Silver Mines (FSM) Stock Undervalued Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Fortuna Silver Mines (FSM - Free Report) . FSM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 10.38, which compares to its industry's average of 22.65. FSM's Forward P/E has been as high as 27.89 and as low as 4.18, with a median of 10.61, all within the past year.

Investors should also recognize that FSM has a P/B ratio of 0.64. The P/B ratio pits a stock's market value against 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 1.23. Within the past 52 weeks, FSM's P/B has been as high as 0.89 and as low as 0.42, with a median of 0.68.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. FSM has a P/S ratio of 1.28. This compares to its industry's average P/S of 2.12.

Finally, our model also underscores that FSM has a P/CF ratio of 4.30. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 12.61. Over the past year, FSM's P/CF has been as high as 6.50 and as low as 2.95, with a median of 4.68.

Value investors will likely look at more than just these metrics, but the above data helps show that Fortuna Silver Mines is likely undervalued currently. And when considering the strength of its earnings outlook, FSM sticks out at as one of the market's strongest value stocks.


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