SouthGobi Resources Ltd. (SGQ) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Teck Resources Limited

Canaf Investments, Inc.

Saturn Oil & Gas, Inc.

SouthGobi Resources Ltd.

Corsa Coal Corp.

Colonial Coal International Corp.

Morien Resources Corp.

Am Resources Corp.

Why is SouthGobi Resources Ltd. ?

With a Negative Book Value, the company has a Weak Long Term Fundamental Strength

Low ability to service debt as the company has a high Debt to EBITDA ratio of 6.77 times

The company has declared Negative results for the last 5 consecutive quarters

NET PROFIT(HY) At CAD -19.07 MM has Grown at -132.2%
OPERATING CASH FLOW(Y) Lowest at CAD 75.34 MM
INTEREST(HY) At CAD 28.46 MM has Grown at 19.06%

Risky -

The stock is trading risky as compared to its average historical valuations
Over the past year, while the stock has generated a return of -16.67%, its profits have fallen by -89%

Underperformed the market in the last 1 year

Even though the market (S&P/TSX 60) has generated returns of 28.43% in the last 1 year, the stock has hugely underperformed and has generate negative returns of -16.67% returns

Real-Time Research Report

Verdict Report

How much should you sell?

All quantity irrespective of whether you are making profits or losses

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Miscellaneous)

When to re-enter? - We will constantly monitor the company and review our call based on new data

Is SouthGobi Resources Ltd. for you?

High Risk, Low Return

Absolute

Risk Adjusted

Volatility

SouthGobi Resources Ltd.

12.9%

-0.33

160.80%

S&P/TSX 60

29.6%

2.24

12.72%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

44.47%

EBIT Growth (5y)

-190.57%

EBIT to Interest (avg)

1.20

Debt to EBITDA (avg)

3.13

Net Debt to Equity (avg)

-2.60

Sales to Capital Employed (avg)

6.82

Tax Ratio

31.77%

Dividend Payout Ratio

Pledged Shares

Institutional Holding

0.05%

ROCE (avg)

60.27%

ROE (avg)

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

NA (Loss Making)

Industry P/E

Price to Book Value

-0.27

EV to EBIT

-21.25

EV to EBITDA

8.04

EV to Capital Employed

11.23

EV to Sales

0.52

PEG Ratio

Dividend Yield

ROCE (Latest)

-52.86%

ROE (Latest)

Negative BV

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

RSI

No Signal

Bollinger Bands

Mildly Bearish

Moving Averages

Bearish (Daily)

KST

Bullish

Dow Theory

Mildly Bullish

No Trend

OBV

No Trend

Mildly Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

8What is working for the Company

INVENTORY TURNOVER RATIO(HY)

Highest at 6.2 times

RAW MATERIAL COST(Y)

Fallen by -141.15% (YoY

OPERATING PROFIT(Q)

Highest at CAD 28.41 MM

OPERATING PROFIT MARGIN(Q)

Highest at 12.23 %

PRE-TAX PROFIT(Q)

Highest at CAD -8.08 MM

NET PROFIT(Q)

At CAD -11.02 MM has Grown at 55.14%

-14What is not working for the Company

NET PROFIT(HY)

At CAD -19.07 MM has Grown at -132.2%

OPERATING CASH FLOW(Y)

Lowest at CAD 75.34 MM

INTEREST(HY)

At CAD 28.46 MM has Grown at 19.06%

DEBT-EQUITY RATIO (HY)

Highest at -115.17 %

Here's what is working for SouthGobi Resources Ltd.

Inventory Turnover Ratio

Highest at 6.2 times and Grown

In each half year in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Operating Profit

Highest at CAD 28.41 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is positive

Operating Profit (CAD MM)

Operating Profit Margin

Highest at 12.23 %

in the last five periods

MOJO Watch

Company's profit margin has improved

Operating Profit to Sales

Pre-Tax Profit

Highest at CAD -8.08 MM

in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (CAD MM)

Pre-Tax Profit

At CAD -8.08 MM has Grown at 67.23%

over average net sales of the previous four periods of CAD -24.66 MM

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (CAD MM)

Net Profit

At CAD -11.02 MM has Grown at 55.14%

over average net sales of the previous four periods of CAD -24.57 MM

MOJO Watch

Near term Net Profit trend is positive

Net Profit (CAD MM)

Raw Material Cost

Fallen by -141.15% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Depreciation

Highest at CAD 23.53 MM

in the last five periods

MOJO Watch

The expenditure on assets done by the company may have gone into operation

Depreciation (CAD MM)

Here's what is not working for SouthGobi Resources Ltd.

Operating Cash Flow

Lowest at CAD 75.34 MM and Fallen

In each year in the last three years

MOJO Watch

The company's cash revenues from business operations are falling

Operating Cash Flows (CAD MM)

Interest

At CAD 28.46 MM has Grown at 19.06%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (CAD MM)

Debt-Equity Ratio

Highest at -115.17 %

in the last five Semi-Annual periods

MOJO Watch

The company is borrowing more to fund its operations; it's liquidity situation may be stressed

Debt-Equity Ratio