After the Friday, Oct. 14, rose of 12.31% to $10.58 per share, SSR Mining Inc. (SSRM, Financial) should be out of your buying list. In fact, according to the following chart and indicators, the stock seems expensive.
The Canadian-based precious metals producer is now trading far above the 50-, 100- and 200-day simple moving average lines. The share price at close Oct. 14 is also 38.5% above the 52-week low of $7.64 and just 8.1% from the 52-week high of $11.44.
And, even though the price-book ratio of 1.3 and the EV-Ebitda ratio of 6.36 are below the industry medians of 1.74 and 9.3, chances that the share price can still appreciate significantly, are low. That is because the underlying commodities are forecasted to trade moderately at least until 2019.
Therefore, I would add to this position as soon as the share price retreats under the 50-SMA line.
I agree with the 33% of Wall Street who are suggesting holding SSR Mining Inc. as of Oct. 14. The other two-thirds are for a buying approach.
SSR Mining is a senior operator in the mining industry and, with its high-performing operations in North America and Argentina, is going to surpass its annual production guidance for the seventh year in a row. The company is forecasting a total production of 275,000 to 302,000 ounces of gold and of 2.3 million to 3.3 million ounces of silver for full fiscal 2018. The production target will be accomplished thanks to shorter haul distances and a better quality of the equipment available at the Marigold Mine in Nevada and to consistent mining and gold recovery rates at the Seabee Gold Operation mine in Canada. Regarding the production of the grey metal, the Puna Operations in Argentina are also expected to continue performing positively.
The stock has a lot of catalysts, but if you want to take full advantage of them, you should increase when the share price falls below $9 per share. Such level will allow you to gain 30% if the stock hits the target of $11.75 per share within the following 52 weeks.
According to the Friday closing price, the expected stock appreciation is about 11%. As of Oct. 14, you can find a better opportunity in the industry with a higher estimate on growth.
Disclosure: I have no positions in any security mentioned in this article.
