May 11, 2023
Top 10 Stock Lundin Gold Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Lundin Gold – Top 10 Stock in Silver Mining and Production
Lundin Gold is listed as a top 10 stock on May 11, 2023 in the market index Silver because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average, and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° Rank of 28 (28% performer), Obermatt assesses an overall hold recommendation for Lundin Gold on May 11, 2023.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Gold Production |
| Index | Gold, Silver, TSX Composite |
| Size class | Medium |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° Assessment Lundin Gold Hold
| 360 METRICS | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 38 |
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| GROWTH | ||||||||
| GROWTH | 57 |
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| SAFETY | ||||||||
| SAFETY | 4 |
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| SENTIMENT | ||||||||
| SENTIMENT | 70 |
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| 360° VIEW | ||||||||
| 360° VIEW | 28 |
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ANALYSIS: With an Obermatt 360° Rank of 28 (better than 28% compared with alternatives), overall professional sentiment and engagement for the stock Lundin Gold are below the industry average. The 360° Rank is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Lundin Gold. The consolidated Growth Rank has a good rank of 57, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. This means that growth is higher than for 57% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 70, which means that professional investors are more optimistic about the stock than for 70% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 38, which means that the share price of Lundin Gold is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 62% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 4, which means that the company has a financing structure that is riskier than 96% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a 360° Rank of 28, Lundin Gold is worse than 72% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 57), and professional market sentiment is positive (Sentiment Rank of 70), but value and safety are below average. The Safety Rank is the least important of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take one minus the growth rank, that is the minimum level that the value rank should have. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). Sometimes market sentiment just extrapolates the past, but sometimes they are right. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Lundin Gold positive
ANALYSIS: With an Obermatt Sentiment Rank of 70 (better than 70% compared with alternatives), overall professional sentiment and engagement for the stock Lundin Gold is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Lundin Gold. Analyst Opinions are at a rank of 62 (better than 62% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 77, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Lundin Gold. Finally, the Professional Investors rank is 79, which means that currently, professional investors hold more stock in this company than in 79% of alternative investment opportunities. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 70 (more positive than 70% compared with investment alternatives), Lundin Gold has a reputation among professional investors that is above-average compared with that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 42, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 58% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Lundin Gold is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Lundin Gold Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 38 (worse than 62% compared with alternatives), Lundin Gold shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Lundin Gold. Price-to-Profit (also referred to as price-earnings, P/E) has a value of 56 which means that the stock price compared with what market professionals expect for future profits is lower than 56% of comparable companies, indicating a good value concerning Lundin Gold's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with an Obermatt Price-to-Book Rank of 7, which means that the stock price is lower compared with invested capital than for 7% of comparable investments. On the other hand, Price-to-Sales is less favorable than 77% of alternatives (only 23% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 15% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 38, is a HOLD recommendation based on Lundin Gold's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, sealing the company's fate early. This needs to be investigated, and the company's optimism verified before deciding to buy the stock. ...read more
Growth Strategy: Lundin Gold Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 57 (better than 57% compared with alternatives), Lundin Gold shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Lundin Gold. Profit Growth has a rank of 69, which means that currently professionals expect the company to grow its profits more than 69% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 99 (above 99% of alternative investments). But Sales Growth has a below the median rank of 31, which means that, currently, professionals expect the company to grow less than 69% of its competitors, and Capital Growth also has a lower rank of 20. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 57, is a BUY recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Lundin Gold. ...read more
Safety Strategy: Lundin Gold Debt Financing Safety risky
| SAFETY METRICS | May 11, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 14 |
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| REFINANCING | ||||||||
| REFINANCING | 33 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 15 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 4 |
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ANALYSIS: With an Obermatt Safety Rank of 4 (better than 4% compared with alternatives), the company Lundin Gold has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Lundin Gold is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Lundin Gold. Liquidity is at 15, meaning that the company generates less profit to service its debt than 85% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 14, meaning the company has an above-average debt-to-equity ratio. It has more debt than 86% of its competitors. Finally, Refinancing is at a rank of 33 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 67% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 4 (worse than 96% compared with alternatives), Lundin Gold has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. ...read more
Combined financial peformance: Lundin Gold Lowest Financial Performance
| COMBINED PERFORMANCE | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 38 |
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| GROWTH | ||||||||
| GROWTH | 57 |
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| SAFETY | ||||||||
| SAFETY | 15 |
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| COMBINED | ||||||||
| COMBINED | 16 |
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ANALYSIS: With an Obermatt Combined Rank of 16 (worse than 84% compared with investment alternatives), Lundin Gold (Gold Production, Canada) shares have lower financial characteristics compared with similar stocks. Shares of Lundin Gold are low in value (priced high) with a consolidated Obermatt Value Rank of 38 (worse than 62% of alternatives), and are riskily financed (Safety Rank of 4, which means above-average debt burdens) but show above-average growth (Growth Rank of 57). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 16, is a sell recommendation based on Lundin Gold's financial characteristics. As the company Lundin Gold shows low value with an Obermatt Value Rank of 38 (62% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 57% of comparable companies (Obermatt Growth Rank is 57). This is a typical case. Companies with above average growth tend to cost more than the sluggish variety. If this is a high-growth company, the low Obermatt Safety Rank of 4 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Lundin Gold, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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