The four miners listed below all trade below their book value, which was one of the favorite metrics of Benjamin Graham, the father of value investing. This is one of the first things to look for when selecting stocks, according to his classic book on the subject, “The Smart Investor.” Book value is what you get when you subtract a company’s total liabilities from its total assets.
Analysts spend a lot of time explaining why this doesn’t really apply to today’s stock market anymore (“The Smart Investor” was first published in 1949.) It’s true that a lot has changed, but if you want to uncover possible stocks of strictly old-fashioned value, especially in industries that haven’t really changed since Graham’s time, you can still find them in the gold mining industry and money.
Gold Alamos (AGI, Financial) is a Canadian mining company that trades on the New York Stock Exchange at a discount of 9% from its book value. Earnings per share this year increased 49.50% year-over-year.
The five-year EPS growth rate is 16.40%. Alamos Gold’s GuruFocus Financial Data Summary finds five good signs and one medium warning sign. The company has no long-term debt and pays a dividend yield of 1.26%.
El Dorado Gold (EGO, Financial) is another New York Stock Exchange listed miner headquartered in Canada. Currently, the stock can be purchased at 47% of its book value.
The year-over-year earnings per share growth rate is 19.6%, and EPS growth over the past five years has averaged 15.50%. Equity far exceeds long-term debt. El Dorado Gold’s GuruFocus Financial Summary shows one good sign, one medium warning sign, and three serious warning signs.
Fortuna Silver Mines
Fortuna Silver Mines (FSM, financial) is valued at 76% of its book value. Based in Canada and listed on the New York Stock Exchange, the company’s earnings per share rose 161.50% this year. The company’s five-year EPS growth rate was 6.75%.
Fortuna’s debt ratio is 0.16 and its debt ratio is 1.07. GuruFocus Financial Data Summary finds six good signs, one medium warning sign, and three serious warning signs.
IAMGOLD (AGI, Financial) is another gold mining stock based in Canada and listed on the NYSE. It is now trading at a discount of 42% from the book value. This year’s earnings per share grew at a rate of 110.10%. The growth of BPA over the past five years is 36.95%.