Pan American Silver Corp. (NYSE:PAAS) Emerges as a Top GARP Pick

For investors looking to balance opportunity with care, the "Growth at a Reasonable Price" (GARP) method presents a solid middle path. This method looks for companies with good growth potential while steering clear of those with very high prices, seeking to reduce the risk of paying too much for future gains. One practical method to apply this is an "Affordable Growth" filter, which selects stocks with good growth measures, acceptable profit and financial strength, and a price that is not too high. The aim is to find businesses where the growth narrative is backed by firm basics and an acceptable cost, possibly providing a more durable investment idea than pure price trend bets.

Pan American Silver Corp. (NYSE:PAAS) recently appeared from such a filtering process. As a large company in the silver and gold mining sector, its selection implies its financial numbers match the main ideas of affordable growth investing. A detailed look at its fundamental report shows the particular positives that got it on this list.

A Notable Growth Picture

The most notable part of Pan American Silver's current fundamental view is its growth path. The company gets a high ChartMill Growth Rating of 8 out of 10, a main part of the affordable growth filter. This rating comes from strong results looking back and forward.

• Recent Results: Over the last year, the company reported a very high 320% growth in Earnings Per Share (EPS) and a good 21.75% rise in Revenue. This points to effective operations and likely gains from supportive metal prices.
• Future Outlook: The growth is projected to persist. Analyst forecasts predict an average yearly EPS growth of 21.25% and Revenue growth of 10.31% in the next years. The filter favors stocks with solid growth, and PAAS's rising EPS growth rate from past to future is a good sign for GARP investors.

Price Assessment

While growth is needed, paying an acceptable price for it is the other part of the GARP idea. Pan American Silver gets a ChartMill Valuation Rating of 6, meaning it is not seen as too costly within its sector and growth view. This fits the filter's need for a valuation rating above 5.

• Varied Initial Signs: A basic Price-to-Earnings (P/E) ratio of 30.38 might seem elevated. However, this must be considered with other factors.
• Comparative and Forward-Looking Measures: Compared to the average P/E of similar companies, PAAS is priced lower than almost 70% of them. More significantly, the forward P/E ratio of 14.78 points to a much more acceptable price based on projected earnings. The company also appears favorable on Enterprise Value to EBITDA and Price to Free Cash Flow measures compared to the sector.
• Growth Adjustment: Importantly, the low PEG ratio—which modifies the P/E for growth—shows the market may not completely account for the company's good earnings growth outlook. This adjustment for growth is a central part of the affordable growth method.

Supporting Basics: Profit and Strength

For growth to last and the price to be fair, a company requires a stable base. The affordable growth filter asks for acceptable ratings in profit and financial strength, which PAAS provides with a rating of 6 in both areas.

• Profit Positives: The company is reliably profitable, with positive net income and operating cash flow. Its profit margin of 19.48% and operating margin of 25.17% place it near the top of its sector, showing it can turn revenue into earnings effectively.
• Financial Strength Review: Regarding stability, PAAS seems firm. It has a sound Altman-Z score, showing little short-term default risk, and a very workable debt level with a low Debt-to-Equity ratio of 0.12. Its current and quick ratios indicate enough cash to meet near-term needs. These elements give trust that the company can support its growth and handle sector changes without too much financial pressure.

Is PAAS a Fit for Affordable Growth?

Based on the rules used in the filtering process, Pan American Silver Corp. shows a profile that fits the Growth at a Reasonable Price thinking. It displays a strong growth driver, both recent and forecasted, which is the main draw. This growth is available at a price that, while not very low, seems acceptable compared to sector peers and especially when thinking of future earnings potential. The acceptable core profit and financial strength ratings suggest this growth is not happening on a weak base, a key point for risk-conscious investors.

It is vital to remember that as a metal producer, PAAS's results are linked to the changing prices of silver and gold, which adds a factor of wider economic and market risk not shown in a basic fundamental filter.

For investors curious about other companies that match this mix of growth, price, and fundamental quality, more results from the Affordable Growth filter are available here.

Disclaimer: This article is for information only and is not financial advice, a suggestion, or an offer or request to buy or sell any securities. The review is based on fundamental data and filter rules, which can change. Investors should do their own study and think about their personal money situation and risk comfort before any investment choices. Past results do not guarantee future outcomes.