Is Gold Resource (GORO) Stock Undervalued Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Gold Resource (GORO) is a stock many investors are watching right now. GORO is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 9.52, which compares to its industry's average of 19.82. Over the past 52 weeks, GORO's Forward P/E has been as high as 49.59 and as low as 8.36, with a median of 12.91.
Investors should also recognize that GORO has a P/B ratio of 1.51. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. GORO's current P/B looks attractive when compared to its industry's average P/B of 1.85. Within the past 52 weeks, GORO's P/B has been as high as 2.97 and as low as 1.23, with a median of 1.73.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. GORO has a P/S ratio of 2.05. This compares to its industry's average P/S of 2.81.
Finally, investors should note that GORO has a P/CF ratio of 11.99. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. GORO's P/CF compares to its industry's average P/CF of 31.84. Within the past 12 months, GORO's P/CF has been as high as 19.85 and as low as 8.59, with a median of 11.43.
These are just a handful of the figures considered in Gold Resource's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that GORO is an impressive value stock right now.
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