SSR Mining Inc. (SSRM, Financial) seems to offer an unusual opportunity for value investors: it is trading at a 15% discount to its book value despite a recently improved earnings report. In August, the company said second-quarter earnings came in at 35 cents, which beat analyst estimates of 15 cents.
Company overview and operations
The gold mining company is headquartered in Denver and operates production facilities in the U. S.,Turkey, Canada and Argentina.
According to SSR Mining's website, these include “high margin, long life” assets in precious metals districts such as “the Çöpler mine along the Tethyan belt in Turkey; the Marigold mine along the Battle Mountain-Eureka trend in Nevada, USA; the Seabee mine along the Trans-Hudson Corridor in Saskatchewan, Canada; and the Puna mine along the Bolivian silver belt in Jujuy, Argentina.”
Financial metrics and valuation
The stock trades with a price-earnings ratio of 18 and the forward earnings multiple is 14. These metrics are significantly below that of the Shiller price-earnings ratio for the Standard and Poor’s 500, which now sits at 30.63. This, combined with the below book value reading, indicates that SSR Mining may be in an undervalued situation given the improved earnings as well.
Total assets come to $5.74 billion and total liabilities were $1.13 billion.
Debt management and financial stability
The company’s debt-to-equity ratio is 0.10, a very low figure, and the ratio of long-term debt to shareholder equity is 0.09, another very low number. Without having to worry about making serious debt payments, SSR is generally in a position to weather quarterly ups and downs in earnings and revenues.
The current ratio of 5.70 tends to back that up as well.
Market presence and competitors
The Nasdaq-traded company has a market capitalization of $3.03 billion and average daily volume is 997,000 shares. As a comparison, the most recognized name in the sector, Newmont Corp. (NEM, Financial), which trades on the New York Stock Exchange, has a market cap of $32 billion and average daily trading volume of 7.16 million shares.
SSR Mining's main competitors include Hecla Mining Co. (HL, Financial), Coeur Mining Inc. (CDE, Financial), First Majestic Silver Corp. (AG, Financial) and Endeavour Silver Corp. (EXK, Financial).
Company history and product portfolio
SSR Mining has been in business in one form or another since 1946. It was formerly known as Silver Standard Resources and, following a merger with Alacer Gold in 2020, changed the name. Although now generally involved in the production of gold, the company also mines copper, lead, silver and zinc.
Dividend and stock performance
SSR Mining pays a dividend of 1.87%.
The daily price chart for SSR Mining shows a wide range of trading for this year, with a March low of $12.75 and a May high of $17.50. Now priced at about halfway into the range, at $15, those considering an investment might think about whether this kind of volatility is tolerable.
SSRM Data by GuruFocus
Note that the 200-day moving average appears to be beginning to turn upward, however slightly. That the stock is trading above its uptrending 50-day moving average (barely, but it counts) is another positive.
Disclaimer: This is not investment advice. It's for educational purposes only.
