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Santacruz Silver Mining (CVE:SCZ) pulls back 14% this week, but still delivers


Santacruz Silver Mining Ltd. (CVE:SCZ) shareholders might be concerned after seeing the share price drop 14% in the last week. But that doesn’t change the fact that the returns over the last half decade have been spectacular. To be precise, the stock price is 418% higher than it was five years ago, a wonderful performance by any measure. So we don’t think the recent decline in the share price means its story is a sad one. Of course what matters most is whether the business can improve itself sustainably, thus justifying a higher price.

Since the long term performance has been good but there’s been a recent pullback of 14%, let’s check if the fundamentals match the share price.

Check out the opportunities and risks within the CA Metals and Mining industry.

Because Santacruz Silver Mining made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

For the last half decade, Santacruz Silver Mining can boast revenue growth at a rate of 68% per year. Even measured against other revenue-focussed companies, that’s a good result. Arguably, this is well and truly reflected in the strong share price gain of 39%(per year) over the same period. Despite the strong run, top performers like Santacruz Silver Mining have been known to go on winning for decades. So we’d recommend you take a closer look at this one, but keep in mind the market seems optimistic.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

earnings-and-revenue-growth
TSXV:SCZ Earnings and Revenue Growth December 1st 2022

It’s good to see that there was some significant insider buying in the last three months. That’s a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. Dive deeper into the earnings by checking this interactive graph of Santacruz Silver Mining’s earnings, revenue and cash flow.

A Different Perspective

It’s nice to see that Santacruz Silver Mining shareholders have received a total shareholder return of 73% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 39% per year), it would seem that the stock’s performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We’ve identified 1 warning sign with Santacruz Silver Mining , and understanding them should be part of your investment process.

Santacruz Silver Mining is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.

Valuation is complex, but we’re helping make it simple.

Find out whether Santacruz Silver Mining is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.



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