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Should Value Investors Buy Fortuna Silver Mines (FSM) Stock?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Fortuna Silver Mines (FSM - Free Report) is a stock many investors are watching right now. FSM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

We should also highlight that FSM has a P/B ratio of 0.81. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.56. Over the past year, FSM's P/B has been as high as 1.13 and as low as 0.63, with a median of 0.88.

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. FSM has a P/S ratio of 2.14. This compares to its industry's average P/S of 2.5.

These are only a few of the key metrics included in Fortuna Silver Mines's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, FSM looks like an impressive value stock at the moment.


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