LUNMF or SCCO: Which Is the Better Value Stock Right Now?

Investors interested in stocks from the Mining – Non Ferrous sector have probably already heard of Lundin Mining (LUNMF) and Southern Copper (SCCO). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Lundin Mining and Southern Copper are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that LUNMF's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

LUNMF currently has a forward P/E ratio of 14.29, while SCCO has a forward P/E of 30.63. We also note that LUNMF has a PEG ratio of 0.72. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SCCO currently has a PEG ratio of 3.46.

Another notable valuation metric for LUNMF is its P/B ratio of 1.45. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, SCCO has a P/B of 12.49.

Based on these metrics and many more, LUNMF holds a Value grade of B, while SCCO has a Value grade of F.

LUNMF has seen stronger estimate revision activity and sports more attractive valuation metrics than SCCO, so it seems like value investors will conclude that LUNMF is the superior option right now.

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Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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