Lomiko Metals Inc. engages in the acquisition, exploration, and development of resource properties in Canada. It explores for graphite and lithium deposits. The company's flagship project is its 100% owned La Loutre graphite property located in southern Quebec. The company was formerly known as Lomiko Resources Inc. and changed its name to Lomiko Metals Inc. in October 2008. Lomiko Metals Inc. was incorporated in 1987 and is based in Surrey, Canada.

Canada

Lomiko Metals Inc.

Basic Materials

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

LMRMF reported revenue of CAD 0mn in the last 12 months, down 0% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 24% from FY23 to CAD -0.04.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 10ppts over six months and grown 4ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is slightly negative.

In the last 12 months, the return on capital employed (RoCE) grew to -10.5%, below the peers. 

Lomiko Metals Inc. reported a return on equity (RoE) of -10.5% in the last 12 months, up from -10.7% in FY24. 

Another important profitability metric, return on assets (RoA), amounted to -10.1% in the last 12 months, an increase from -10.3% in FY24. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -0.9 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

LMRMF has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, negligible return on capital, and inadequate interest coverage. We note an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, LMRMF is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, LMRMF is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Based on key historical and expected multiples, the stock is greatly undervalued relative to its peers. 

Lomiko Metals Inc.

$ 0.09

3

Lomiko Metals Inc.

$ 0.09

3

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Profitability factor

Risk / Profitability

Risk factor

Profitability factor

$ 0.09

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