Despite an already strong run, Jaguar Mining Inc. (TSE:JAG) shares have been powering on, with a gain of 26% in the last thirty days. The last month tops off a massive increase of 206% in the last year.
In spite of the firm bounce in price, given about half the companies in Canada have price-to-earnings ratios (or “P/E’s”) above 15x, you may still consider Jaguar Mining as an attractive investment with its 8.8x P/E ratio. Nonetheless, we’d need to dig a little deeper to determine if there is a rational basis for the reduced P/E.
With earnings growth that’s exceedingly strong of late, Jaguar Mining has been doing very well. It might be that many expect the strong earnings performance to degrade substantially, which has repressed the P/E. If that doesn’t eventuate, then existing shareholders have reason to be quite optimistic about the future direction of the share price.
See our latest analysis for Jaguar Mining
