Gatos Story

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GATO -- USA Stock  

USD 11.19  0.81  7.80%

66% of stocks are less volatile than Gatos, and 90% of all traded equity instruments are projected to make higher returns than the company over the 90 days investment horizon. Although many risk-takers are getting more into basic materials space, some of us are not very happy with Gatos Silver's current volatility. We are going to inspect if the current expected returns justify Gatos Silver's volatility. The latest Gatos risk factors may impact the value of the stock as we estimate Gatos Silver as currently fairly valued. The real value is approaching 11.05 per share.
Published over two weeks ago
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Breaking down Gatos volatility
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. Gatos Silver has a current ratio of 1.16, suggesting that it is not liquid enough and may have problems paying out its financial obligations when due.
On a scale of 0 to 100, Gatos Silver holds a performance score of 5. The company retains a Market Volatility (i.e. Beta) of 0.3339, which attests to possible diversification benefits within a given portfolio. Let's try to break down what Gatos's beta means in this case. As returns on the market increase, Gatos Silver returns are expected to increase less than the market. However, during the bear market, the loss on holding Gatos Silver will be expected to be smaller as well. Although it is vital to follow Gatos Silver current price history, it is good to be conservative about what you can do with the information regarding equity current price movements. The philosophy towards determining future performance of any stock is to evaluate the business as a whole together with its past performance, including all available fundamental and technical indicators. We have found twenty-one technical indicators for Gatos Silver, which you can use to evaluate the performance of the firm. Please utilizes Gatos Silver variance, value at risk, as well as the relationship between the Value At Risk and skewness to make a quick decision on whether Gatos Silver current trending patterns will revert.
Volatility is a rate at which the price of Gatos Silver or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Gatos Silver may increase or decrease. In other words, similar to Gatos's beta indicator, it measures the risk of Gatos Silver and helps estimate the fluctuations that may happen in a short period of time. So if prices of Gatos Silver fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.

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.

How Gatos utilizes its cash?

To perform a cash flow analysis of Gatos Silver, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Gatos Silver is receiving and how much cash it distributes out in a given period. The Gatos Silver cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Gatos Silver Net Cash Flow from Operations is quite stable at the moment as compared to the past year. The company's current value of Net Cash Flow from Operations is estimated at (18.87 Million)

Gatos Silver Volatility Drivers

Gatos Silver unsystematic risk is unique to Gatos Silver and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Gatos Silver you can also buy Alexco Resource Corp. You can also mitigate this risk by investing in the other precious metals & mining sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Gatos Silver important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Gatos Silver income statement and balance sheet. Here are more details about Gatos volatility.
Click cells to compare fundamentals

Acquisition by Gonzales Igor of 10132 shares of Gatos Silver subject to Rule 16b-3

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 grant of common stock by Gonzales Igor, the corporate stakeholder, on 6th of April 2021. This event was filed by Gatos Silver Inc with SEC on 2021-04-06. 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.

Detailed Perspective On Gatos Silver

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

Gatos Silver has 95 percent chance to finish above $11.26 in April

The kurtosis is down to 0.54 as of today. Gatos Silver is displaying above-average volatility over the selected time horizon. Investors should scrutinize Gatos Silver independently to ensure intended market timing strategies are aligned with expectations about Gatos Silver volatility. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Gatos Silver's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Gatos Silver's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

The Bottom Line

Whereas some firms in the other precious metals & mining industry are either recovering or due for a correction, Gatos may not be as strong as the others in terms of longer-term growth potentials. To summarize, as of the 28th of March 2021, our final 30 days Buy-Hold-Sell recommendation on the company is Strong Sell. However, we believe Gatos Silver is currently fairly valued with low probability of financial unrest for the next two years.

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 Ellen Johnson 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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