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Are Investors Undervaluing Silvercorp Metals (SVM) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Silvercorp Metals (SVM - Free Report) . SVM is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Investors should also recognize that SVM has a P/B ratio of 1.01. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.66. SVM's P/B has been as high as 1.27 and as low as 0.65, with a median of 0.82, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SVM has a P/S ratio of 3.03. This compares to its industry's average P/S of 3.12.

Finally, investors will want to recognize that SVM has a P/CF ratio of 10.18. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 38.66. Within the past 12 months, SVM's P/CF has been as high as 14.86 and as low as 6.28, with a median of 9.06.

These are just a handful of the figures considered in Silvercorp Metals's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that SVM is an impressive value stock right now.


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