| Is Royal Sapphire Corp (CVE:RSL) A Basic Materials Industry Laggard Or Leader? | |
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TSXV:RSL PE PEG Gauge Jan 17th 18 The metals and mining sector’s PE is currently hovering around 12x, lower than the rest of the Canadian stock market PE of 17x. This illustrates a somewhat under-priced sector compared to the rest of the market. Though, the industry did returned a lower 7.18% compared to the market’s 9.24%, which may explain the lower relative valuation. Since Royal Sapphire’s earnings doesn’t seem to reflect its true value, its PE ratio isn’t very useful. A loose alternative to gauge Royal Sapphire’s value is to assume the stock should be relatively in-line with its industry. What this means for you:Are you a shareholder? Royal Sapphire has been a metals and mining industry laggard in the past year. If your initial investment thesis is around the growth prospects of Royal Sapphire, there are other metals and mining companies that have delivered higher growth, and perhaps trading at a discount to the industry average. Consider how Royal Sapphire fits into your wider portfolio and the opportunity cost of holding onto the stock. Are you a potential investor? If Royal Sapphire has been on your watchlist for a while, now may be a good time to dig deeper into the stock. Although its growth has delivered lower growth relative to its metals and mining peers in the near term, the market may be pessimistic on the stock, leading to a potential undervaluation. Before you make a decision on the stock, I suggest you look at Royal Sapphire’s future cash flows in order to assess whether the stock is trading at a reasonable price. For a deeper dive into Royal Sapphire’s stock, take a look at the company’s latest free analysis report to find out more on its financial health and other fundamentals. Interested in other basic materials stocks instead? Use our free playform to see my list of over 2000 other basic materials companies trading on the market.
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.
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Royal Sapphire Corp. is based in Canada. Royal Sapphire Corp. is listed in Canada. Its market capitalisation is CA$ 338 000 as of today (US$ 263 322, € 213 501). Its stock quote reached its highest recent level on December 07, 2012 at CA$ 1.60, and its lowest recent point on October 30, 2015 at CA$ 0.02. Royal Sapphire Corp. has 1 690 000 shares outstanding. |