Buenaventura Mining Co Inc (NYSE:BVN) has been experiencing fluctuations in the stock market, with a daily loss of -4.26% and a 3-month gain of 10.65%. The company’s Earnings Per Share (EPS) stands at 0.41. But is the stock truly fairly valued? This article aims to provide a detailed insight into Buenaventura Mining Co’s valuation.
Buenaventura Mining Co Inc is a mining company that engages in the exploration, mining, and processing of gold and silver. It operates various segments including production and sale of minerals, exploration and development projects, energy generation and transmission services, insurance brokerage, rental of mining concessions, holding of investment in shares, and industrial activities. The company operates in Peru, America (excluding Peru), Europe, and Asia.
Based on the estimation of fair value known as the GF Value, Buenaventura Mining Co (NYSE:BVN) appears to be fairly valued. The GF Value is calculated using historical multiples, a GuruFocus adjustment factor, and future business performance estimates. If a stock’s price is significantly above the GF Value Line, it indicates overvaluation and a potential poor future return. Conversely, if it is significantly below the GF Value Line, its future return is likely to be higher.
While Buenaventura Mining Co has strong financial strength, with a cash-to-debt ratio that ranks better than 99.96% of companies in the Metals & Mining industry, its profitability is poor. The operating margin is -13.24%, ranking worse than 65.11% of companies in the industry. However, its 3-year average EBITDA growth rate ranks better than 96.99% of companies in the same industry.
In terms of return on invested capital (ROIC) and weighted average cost of capital (WACC), Buenaventura Mining Co’s ROIC is -2.52, while its cost of capital is 10.54. This indicates that the company is not currently creating value for shareholders.
In conclusion, Buenaventura Mining Co’s stock appears to be fairly valued. The company has strong financial health, although its profitability is poor. Its growth ranks better than most companies in the industry. Investors should conduct further research to make an informed decision.
– GuruFocus. (Source: GuruFocus Technology)