The metals and mining sector’s PE is currently hovering around 14.9x, relatively similar to the rest of the Australian stock market PE of 18.1x. This means the industry, on average, is fairly valued compared to the wider market – minimal expected gains and losses from mispricing here. Furthermore, the industry returned a similar 10.35% on equities compared to the market’s 11.86%. On the stock-level, Discovery Africa is trading at a PE ratio of 11x, which is relatively in-line with the average metals and mining stock. In terms of returns, Discovery Africa generated 22.39% in the past year, which is 12.04% over the metals and mining sector.

Next Steps:

If you’ve been keeping an eye on the materials sector, now is the right time to dive deeper into the stock-level. The high growth prospect makes stocks such as Discovery Africa a more appealing investment case, though the industry is trading relatively in-line with the rest of the wider market. However, before you make a decision on the stock, I suggest you look at Discovery Africa’s fundamentals in order to build a holistic investment thesis.

• 1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
• 2. Historical Track Record: What has DAF’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
• 3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Discovery Africa? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

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.