For investors looking for a mix of chance and caution, the "Growth at a Reasonable Price" (GARP) method presents a persuasive middle path. It tries to find companies that are not only increasing at a good rate but are also priced at levels that do not require flawless future results. This method avoids the high dangers of speculative growth stocks and the slow progress that can come with some value choices. By looking for stocks with good growth scores, acceptable financial condition and earnings, and a fair price, investors can create a collection set up for steady gain. One stock that recently appeared from this kind of "Affordable Growth" filter is SSR MINING INC (NASDAQ:SSRM).
A Look at Growth and Price
The main attraction of SSRM for a GARP method is its mix of good growth outlook and a seemingly fair cost. ChartMill's basic review gives the company a good Growth score of 8 out of 10 and a higher Price score of 8. This combination hints the market may not completely value the company's future progress.
- Recent and Expected Growth: The company has shown good business growth, with Revenue increasing more than 30% in the last year. More key, analyst views suggest a notable speed-up. SSRM is predicted to grow its Earnings Per Share (EPS) by an average of more than 63% each year in the near future, with Revenue growth also expected to rise to almost 37% per year. This expected speed-up is a main sign for growth-focused investors.
- Fair Price Measures: Even with these growth forecasts, SSRM's stock looks low-priced compared to its field. Its Price-to-Forward Earnings ratio is only 7.21, which is less expensive than about 95% of similar companies in the Metals & Mining field. This low number, especially when compared to high expected earnings growth, leads to a very low PEG ratio, a common measure used by GARP investors to find growth that is not too costly.
Reviewing Financial Base and Earnings Strength
While growth and price are the main filters, the "affordable" or "reasonable" part of the method also depends on the company's financial steadiness and ability to regularly produce profits. This makes sure the growth plan is based on a firm base instead of financial tricks or unstable actions. SSRM gets a middle but okay score of 6 for both its Earnings and Financial Condition.
- Earnings Positives: The company keeps good profit levels, with a Gross Margin of 46.52% that is with the top in its field. Its Return on Equity (6.61%) and Return on Invested Capital (5.67%) also do better than most field peers, showing good use of investor money.
- Financial Condition Points: The balance sheet shows a careful debt situation, with a low Debt-to-Equity ratio of 0.04. However, investors should see that the company's Altman-Z score, a gauge of bankruptcy danger, is not as strong as many peers, though it now shows little direct danger. The full Condition score of 6 suggests a company that is financially steady but not very strong, a balance that is part of the filter rules for "acceptable" condition.
Why These Rules Are Important for GARP Investing
The filter thinking that found SSRM is intentional. A high Growth score makes sure the company is on a good path. A good Price score stops paying too much for that future chance, which is a usual error in growth investing. The needs for acceptable Earnings and Condition scores are key protections; they help remove companies that are growing by taking on too much debt or are not turning sales into lasting profits. Together, these filters try to find companies where the growth story is backed by basic business quality and a logical stock price.
For a complete look at all basic measures, you can see the full Fundamental Analysis Report for SSR Mining.
Locating Like Chances
SSR Mining acts as one case of the kind of company that can be found through a strict Affordable Growth filter. Investors wanting to look at other stocks that fit similar rules of strong growth, fair price, and good basics can use the set screeners to do their own study. You can locate more possible choices by looking at the Affordable Growth Stock Screener on ChartMill.
Disclaimer: This article is for information only and is not financial guidance, a suggestion, or a bid to buy or sell any securities. The review is based on given data and basic scores, which can shift. Investors should do their own complete study and think about their personal money situation and risk comfort before making any investment choices.
