In order to measure the good health (liquidity and solvency) of a company, how much cash has been generated by the company needs to be analysed. Price/cash flow (P/CF) ratio is a measure of the market’s expectations of a firm’s future financial health. The ratio is considered more reliable than the price/earnings (P/E) ratio to evaluate a company, as cash flow is not easily manipulated unlike earnings which could be easily manipulated through depreciation and other non-cash factors.
Ubika Research has shortlisted eight Canadian mining stocks that have recorded low P/CF ratio in the last reported quarterly results. These stocks have P/CF ratio of less than 10, which is considered as an attractive investment from a valuation standpoint. During the past 1-month, these stocks have registered gains with average trading volume above 100,000. Most Analysts covering these stocks recommend a Buy and their 12-month price targets indicate significant upside potential from current levels.
|
Company Name |
Exchange |
Ticker |
Market Cap |
Last Price |
1-Month Average Volume |
1-Month Price Change |
Price to Cash Flow Ratio* |
Total Analyst Coverage |
Buy Rating |
Upside |
|
Teranga Gold Corp |
TSX |
TGZ |
232.8 |
0.66 |
1,762,951 |
3.1% |
1.72 |
11 |
64% |
94% |
|
Endeavour Mining Corp |
TSX |
EDV |
338.8 |
0.82 |
1,331,547 |
1.2% |
2.52 |
7 |
86% |
66% |
|
Timmins Gold Corp |
TSX |
TMM |
299.0 |
1.83 |
1,346,991 |
19.6% |
4.32 |
14 |
71% |
13% |
|
Luna Gold Corp |
TSX |
LGC |
129.3 |
1.06 |
526,176 |
3.9% |
5.18 |
8 |
100% |
102% |
|
Dominion Diamond Corp |
TSX |
DDC |
1,254.0 |
14.73 |
256,294 |
11.8% |
5.29 |
9 |
89% |
34% |
|
Nevsun Resources Ltd |
TSX |
NSU |
781.4 |
3.92 |
595,197 |
2.1% |
6.54 |
13 |
77% |
37% |
|
Kirkland Lake Gold Inc |
TSX |
KGI |
261.0 |
3.72 |
321,389 |
25.7% |
9.65 |
10 |
50% |
15% |
|
Fortuna Silver Mines Inc |
TSX |
FVI |
625.3 |
4.96 |
366,876 |
11.2% |
9.85 |
9 |
56% |
12% |
Source: Bloomberg
*P/CF Ratio as of latest reported quarter
Company Description:
Teranga Gold Corp (TSX: TGZ)
Teranga Gold Corporation is a Canadian-based gold company. The company was created to acquire the Sabodala gold project (including the Sabodala gold mine) and certain exploration properties in south eastern Senegal.
Endeavour Mining Corp (TSX: EDV)
Endeavour Mining Corporation is a gold mining company. The company engages in gold mine production, development and exploration activities in West Africa. Endeavour Mining operates mining projects located in Ghana, Mali, Burkina Faso, and Cote d’Ivoire.
Timmins Gold Corp (TSX: TMM)
Timmins Gold Corporation operates as a gold exploration and production company. The company owns and operates a Mexican based mine where they develop, explore and produce gold.
Luna Gold Corp (TSX: LGC)
Luna Gold Corporation explores for gold in the United States and South America.
Dominion Diamond Corp (TSX: DDC)
Dominion Diamond Corporation mines and markets rough diamonds. The company mines for rough diamonds in the Canada’s Northwest Territories. Dominion also provides the sorting and selling of rough diamonds in Canada, Belgium and India.
Nevsun Resources Ltd (TSX: NSU)
Nevsun Resources Ltd. is the operator of the Bisha Mine which began construction in 2008 and commercial production in 2011. The mine produced gold-silver dore until 2013 when the product switched to copper in concentrate and will expand to also produce Zinc concentrates.
Kirkland Lake Gold Inc (TSX: KGI)
Kirkland Lake Gold, Inc. is an operating gold mining company located in Ontario, Canada. The company owns the Macassa Mine and mill and several contiguous gold producing properties. Kirkland Lake is developing a lode gold deposit.
Fortuna Silver Mines Inc (TSX: FVI)
Fortuna Silver Mines Inc. is a growth oriented, silver and base metal producer focused on mining opportunities in Latin America. The company’s primary assets are the San Jose silver-gold mine in Mexico and the Caylloma silver-lead-zinc mine in Peru. Fortuna Silver Mines is selectively pursuing additional acquisition opportunities in the Americas.
