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Stock performance snapshot
Avino Silver & Gold Mines (TSX:ASM) has drawn investor attention after a pullback in its share price, with the stock down about 9% over the past month and roughly 27% over the past 3 months.
See our latest analysis for Avino Silver & Gold Mines.
That recent pullback sits against a much stronger backdrop, with the stock delivering a very large 1 year total shareholder return and an even larger multi year total shareholder return. At the same time, short term share price momentum has clearly faded.
If you are looking beyond precious metals and want other ideas on your radar, this is a good moment to scan 9 top silver producer stocks
So with the stock pulling back while the 1 year and multi year returns remain very strong, and with an intrinsic value estimate suggesting a discount, is this a genuine buying opportunity, or is the market already pricing in future growth?
Most Popular Narrative: 89.8% Undervalued
According to the most followed narrative from RockeTeller, Avino Silver & Gold Mines is assigned a fair value of CA$89 per share versus the recent close around CA$9.06, implying a very large gap between the market price and that narrative estimate.
At $100 silver & 7M oz, Avino could fairly trade in the $33 to $65 per share range.
At $150 silver, upside is described as $56 to $112 per share.
This narrative leans heavily on much higher production, premium precious metal prices, and generous cash flow multiples, and then combines those elements into a valuation story.
Result: Fair Value of CA$89 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, this depends on ambitious production growth and silver prices reaching very high levels. Setbacks on either front could quickly weaken the bullish case.
Find out about the key risks to this Avino Silver & Gold Mines narrative.
Another view on valuation
While the popular user narrative points to a very large upside, the market is currently pricing Avino at a P/E of 30.2x, compared with a fair ratio of 22.7x, the Canadian metals and mining industry on 16.2x, and peers on 22.5x. That richer multiple suggests valuation risk if expectations slip, so how comfortable are you with paying a higher price for growth?
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
Conflicted by the mix of optimism and caution in this story? Take a moment to review the numbers yourself, compare both sides, and weigh the 3 key rewards and 3 important warning signs