Dolly Varden Silver Corp.'s (DV:TSX.V; DOLLF:OTCQX) stock was upgraded to Good from Above Average by SADIF Investment Analytics, the research firm reported in a July 13 research note.
"The company has a bright prospect, with an overall score of 94/100," SADIF wrote.
This total score reflects how Dolly Varden fared since May 26, 2023, when SADIF last rated it in a dozen categories, using the Summary StockMarks Ratings system, versus the entire population of 2,168 Canada-listed companies rated today. The current scores for the British Columbia-based minerals explorer are based on data as of market close on July 12, 2023.
Positive factors
Supporting Dolly Varden's uprating was the increase in the company's Business Quality (score of 64), due to its 1,400% increase in earnings.
The silver company also currently boasts strong financials and favorable technical indicators, estimates and valuation. Sentiment toward Dolly Varden is bullish. With low operational, information and market risk, it is safe.
When compared to its second closest rated competitor Aftermath Silver, Dolly Varden appears to be more undervalued and more likely to outperform the market.
Down the line
Looking ahead, SADIF wrote, Dolly Varden is expected to further improve in the Quality category, which encompasses three subcategories: Business, Financials and Earnings.
On the downside, the company's positive business outlook is expected to weaken given the recent deterioration in SADIF's estimates. The research firm bases these estimates on the amount of revenue it expects the company to generate in upcoming quarters. For Dolly Varden, this is zero in Q3/23.
"Earnings per share are weakening while the company's book value per share is falling," wrote SADIF. "Our target price has an implicit annual compound annual growth rate of (8.6%), well below that of the analyst consensus."
However, taking a view further out, SADIF expects the Canadian silver company to be a good investment that delivers long-term returns.
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