Jaguar Mining Inc. (TSE:JAG) shares have continued their recent momentum with a 39% gain in the last month alone. But the gains over the last month weren’t enough to make shareholders whole, as the share price is still down 6.0% in the last twelve months.
In spite of the firm bounce in price, Jaguar Mining’s price-to-earnings (or “P/E”) ratio of 9.8x might still make it look like a buy right now compared to the market in Canada, where around half of the companies have P/E ratios above 15x and even P/E’s above 29x are quite common. However, the P/E might be low for a reason and it requires further investigation to determine if it’s justified.
For instance, Jaguar Mining’s receding earnings in recent times would have to be some food for thought. It might be that many expect the disappointing earnings performance to continue or accelerate, which has repressed the P/E. If you like the company, you’d be hoping this isn’t…
