Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK ( TheStreet) -- Fortuna Silver Mines (NYSE: FSM) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.
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- FSM has underperformed the S&P 500 Index, declining 19.43% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- FORTUNA SILVER MINES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, FORTUNA SILVER MINES INC increased its bottom line by earning $0.25 versus $0.07 in the prior year.
- 48.60% is the gross profit margin for FORTUNA SILVER MINES INC which we consider to be strong. Regardless of FSM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FSM's net profit margin of 22.35% significantly outperformed against the industry.
- Net operating cash flow has significantly increased by 140.15% to $17.56 million when compared to the same quarter last year. In addition, FORTUNA SILVER MINES INC has also vastly surpassed the industry average cash flow growth rate of -50.24%.
- FSM's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.96, which clearly demonstrates the ability to cover short-term cash needs.
-- Written by a member of TheStreet Ratings Staff