AIM:AAU PE PEG Gauge Feb 20th 18
The metals and mining industry is trading at a PE ratio of 11.79x, lower than the rest of the UK stock market PE of 17.76x. This means the industry, on average, is relatively undervalued compared to the wider market – a potential mispricing opportunity here! Though, the industry returned a similar 11.12% on equities compared to the market’s 11.98%. On the stock-level, Ariana Resources is trading at a lower PE ratio of 0.94x, making it cheaper than the average metals and mining stock. In terms of returns, Ariana Resources generated 56.27% in the past year, which is 45.15% over the metals and mining sector.
Next Steps:
Ariana Resources is a metals and mining industry laggard in terms of its future growth outlook. This is possibly reflected in the PE ratio, with the stock trading below its peers. If the stock has been on your watchlist for a while, now may be the time to dig deeper. Although the market is expecting lower growth for the company relative to its peers, Ariana Resources is also trading at a discount, meaning that there could be some value from a potential mispricing. However, before you make a decision on the stock, I suggest you look at Ariana Resources’s fundamentals in order to build a holistic investment thesis.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.