Gatos Story

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GATO -- USA Stock  

USD 12.75  0.01  0.08%

The stock is still going through an active upward rally. While some baby boomers are getting worried about basic materials space, it is reasonable to outline Gatos Silver as an investment alternative. Here we also measure the ability of Gatos Silver to meet its long-term debt obligations, such as interest payments on debt, the final principal payment on the debt, and any other fixed obligations like lease payments.
Published over two weeks ago
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Should I drop my Gatos (NYSE:GATO) position?
The firm currently holds 10.57 M in liabilities with Debt to Equity (D/E) ratio of 0.09, which may suggest the company is not taking enough advantage from borrowing. Our advice tool can cross-verify current analyst consensus on Gatos Silver and to analyze the company potential to grow in the current economic cycle.
Gatos Silver financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Gatos Silver, including all of Gatos Silver's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Gatos Silver assets, the company is considered highly leveraged. Understanding the composition and structure of overall Gatos Silver debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding Gatos Total Debt

Gatos Silver liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Gatos Silver has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Gatos Silver balance sheet include debt obligations and money owed to different Gatos Silver vendors, workers, and loan providers. Below is the chart of Gatos main long-term debt accounts currently reported on its balance sheet.
You can use Gatos Silver financial leverage analysis tool to get a better grip on understanding its financial position

How important is Gatos Silver's Liquidity

Gatos Silver financial leverage refers to using borrowed capital as a funding source to finance Gatos Silver ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Gatos Silver financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Gatos Silver's total debt and its cash.

Gatos Silver exotic insider transaction detected

Legal trades by Gatos Silver insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Gatos insider trading alert for general transaction of common stock by Hanneman Karl L, the corporate stakeholder, on 21st of December 2020. This event was filed by Gatos Silver Inc with SEC on 2020-12-21. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Another Deeper Perspective

Net Loss for the year was (49.76 M) with loss before overhead, payroll, taxes, and interest of (2.32 M).

Asset Breakdown

145.8 M
Assets Non Current
Tax Assets
Current Assets
Total Assets169.52 Million
Current Assets23.77 Million
Assets Non Current145.75 Million
Tax Assets27.61 Million

Will Gatos Silver growth be reliable after the rise?

The coefficient of variation is down to 346.93 as of today. Gatos Silver currently demonstrates below-verage downside deviation. It has Information Ratio of 0.26 and Jensen Alpha of 1.51. However, we do advice investors to further question Gatos Silver expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

Our Final Takeaway

Whereas few other entities under the other precious metals & mining industry are still a bit expensive, Gatos Silver may offer a potential longer-term growth to institutional investors. While some institutional investors may not share our view we believe that the current risk-reward utility is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Gatos Silver.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Gatos Silver. Please refer to our Terms of Use for any information regarding our disclosure principles.

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