The four miners listed below are all trading below their book value, which was one of the favorite metrics of Benjamin Graham, the father of value investing. It’s one of the first things to look for when screening for stocks, according to his classic book on the subject, "The Intelligent Investor." Book value is what you get when you subtract a company’s total liabilities from its total assets.
Analysts spend a lot of time explaining why this no longer really applies to the present day stock market ("The Intelligent Investor" was first published in 1949.) It is true that a lot of things have changed, but if you want to uncover possible value stocks strictly old school-style, especially in industries that haven't really changed since Graham's time, you could still find them in the gold and silver mining sector.
The five-year EPS rate of growth is 16.40%. The GuruFocus summary of Alamos Gold's financials finds five good signs and one medium warning sign. The company has no long-term debt and pays a dividend yield of 1.26%.
El Dorado Gold
The growth rate of earnings per share year over year is 19.6%, and EPS growth over the past five years has averaged 15.50%. Shareholder equity greatly exceeds long-term debt. The GuruFocus financials summary of El Dorado Gold shows one good sign, one medium warning sign and three severe warning signs.
Fortuna Silver Mines
Fortuna Silver Mines (FSM, Financial) is priced at 76% of its book value. Based in Canada and traded on the New York Stock Exchange, the earnings per share of this company grew this year by 161.50%. The company’s five-year EPS growth rate was 6.75%.
Fortuna’s debt-to-equity ratio sits at 0.16 and its debt-to-Ebitda ratio is 1.07. The GuruFocus summary of financials finds six good signs, one medium warning sign and three severe warning signs.
IAMGOLD (IAG, Financial) is another gold mining stock headquartered in Canada and NYSE-listed. It trades now at a 42% discount to book value. This year’s earnings per share increased at a 110.10% pace. The EPS growth over the past five years is 36.95%.
The debt-to-equity ratio is 0.22. Debt-to-Ebitda stands at 1.41. A financials summary by GuruFocus shows IAMGOLD with one good sign, three medium warning signs and one severe warning sign.