Have a look at the recent track record of AG’s earnings disasters.
The company has missed earnings expectations for 5 of the past 6 quarters with one meet. At the same time, both earnings and revenues are going in the opposite direction, valuation remains rich. Tell me why?
There isn’t any growth to speak of at AG, so why does it deserve such a rich price to sales ration, at a staggering 8x sales. A fine company like PAAS, one that has good free cash flow, is stuck at under 3x, alongside GPL, FSM, EXK and HL (4.3X). I want to be educated here and understand why AG should trade at more triple the sales of PAAS?
Is the the low FPE ratio? Perhaps.
But how reliable is the “E” in “PE” when the company misses by a football field almost every quarter?
With the raw commodity in the penalty box and miners in full liquidation mode by long term faithful investors, I sense much lower prices are in order for AG–perhaps down to $12.