Undervalued Opportunity: CIA DE MINAS BUENAVENTUR-ADR (NYSE:BVN) Screened by Decent Value Method

For investors looking for opportunities in undervalued securities, the "Decent Value" screening method provides a structured process for finding companies trading below their inherent value while keeping sound operational basics. This method sorts for stocks with good valuation ratings, typically above 7 on ChartMill's scoring system, while also needing acceptable scores in profitability, financial condition, and growth. The goal is to find businesses where the market price seems separated from actual financial performance, possibly forming favorable risk-reward situations for investors with a long-term view.

Valuation Assessment

Compañia de Minas Buenaventura SAA (NYSE:BVN) displays notable valuation features that match value investment standards. The company's present valuation numbers indicate possible undervaluation compared to both industry counterparts and wider market indexes:

• Price-to-Earnings ratio of 10.91 looks good against industry average of 31.20 and S&P 500 average of 26.76
• Price-to-Forward Earnings ratio of 9.98 places BVN lower priced than 83% of industry rivals
• The stock is available at a notable reduction to S&P 500 forward P/E average of 22.63

For value investors, these valuation numbers are important because they signal the market may be valuing BVN below its inherent worth. The company's valuation rating of 7/10 mirrors this appealing pricing relative to fundamental results, forming the possible safety buffer that Benjamin Graham highlighted in his value investing ideas.

Financial Health Evaluation

BVN shows acceptable financial steadiness with a health rating of 6/10. The company keeps suitable liquidity reserves and workable debt amounts:

• Current ratio of 2.54 shows a solid short-term liquidity condition
• Quick ratio of 2.31 is better than 64% of industry counterparts
• Debt-to-equity ratio of 0.24 implies minimal dependence on loans
• Altman-Z score of 3.06 shows no near-term bankruptcy issues

While the company's return on invested capital is currently below its cost of capital, indicating some efficiency issues, the general financial condition gives enough steadiness for value investors who favor companies able to endure economic downturns without high financial danger.

Profitability Analysis

With a profitability rating of 6/10, BVN presents varied but mostly acceptable operational results:

• Profit margin of 38.38% is in the best 4% of the metals and mining industry
• Return on equity of 14.15% is higher than 88% of industry rivals
• Operating margin of 23.98% is better than 77% of sector counterparts
• Gross margin upward trend shows operational efficiency improvements

These profitability numbers are vital for value investors because lasting earnings ability supports the argument that inherent worth is greater than market price. Good margins and returns imply the company has competitive strengths that may not be completely represented in the current valuation.

Growth Trajectory

BVN's growth rating of 6/10 shows positive movement with space for enhancement:

• Revenue rose 32.25% over the last year
• Earnings per share expanded 424.08% year-over-year
• Projected annual EPS growth of 11.90% estimated for the future
• Revenue growth speed-up expected in upcoming years

For value investors, growth possibilities supply the driver that could reduce the difference between the present market price and inherent value. The mix of recent good results and positive future forecasts implies BVN may be set for continued fundamental progress.

Investment Considerations

The fundamental review of Compañia de Minas Buenaventura shows a company trading at appealing valuation levels while maintaining acceptable operational results across important measures. The detailed fundamental report gives more background for investors performing deeper investigation.

Value investors might find BVN interesting because of the separation between its valuation and fundamental performance. The company's good margins, acceptable financial condition, and positive growth path, when joined with reduced pricing, form the kind of opportunity value investors have traditionally looked for. However, as with any mining company, investors should think about commodity price vulnerability, political elements in Peru, and industry cycles.

For investors curious about similar opportunities, the Decent Value Stocks screen gives continuous finding of companies meeting these standards.

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice, recommendation, or endorsement of any security. Investors should conduct their own research and consult with financial advisors before making investment decisions. Past performance does not guarantee future results.