When close to half the companies in Canada have price-to-earnings ratios (or “P/E’s”) below 13x, you may consider Lundin Mining Corporation (TSE:LUN) as a stock to potentially avoid with its 18.2x P/E ratio. Although, it’s not wise to just take the P/E at face value as there may be an explanation why it’s as high as it is.
Lundin Mining has been struggling lately as its earnings have declined faster than most other companies. One possibility is that the P/E is high because investors think the company will turn things around completely and accelerate past most others in the market. If not, then existing shareholders may be very nervous about the viability of the share price.
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