Vortex Metals Inc. engages in the exploration of copper-gold properties in Mexico. It holds 100% interests in two copper-gold volcanogenic massive sulfide (VMS) properties, including the Riqueza Marina copper-gold project covering an area of 15,840 hectares; and the Zaachila copper-gold project in covering an area of 3,264 hectares located in the state of Oaxaca. The company is based in Toronto, Canada.

Canada

Vortex 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. 

VMSSF reported revenue of CAD 0mn in the last 12 months, down 0% from FY23. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. EPS fell 6% from FY23 to CAD -0.03.

Over the past six months, the stock has consistently fallen, resulting in a 63% total decrease. When measured against its worldwide peers from the same industry (as shown above), the stock has been weaker, underperforming by 75ppts. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is slightly unfavourable.

Vortex Metals Inc. reported a return on equity (RoE) of -39.9% in the last 12 months, up from -124.9% in FY22. 

Another important profitability metric, return on assets (RoA), amounted to -30.3% in the last 12 months, an increase from -64.7% in FY22. 

In the last 12 months, the return on capital employed (RoCE) grew to -39.9%, below the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 39.6 in the past several years. This ratio implies a excellent 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.

VMSSF 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 may be 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 very high. Among the negative credit factors, we point to weak positions in its industry, negligible return on capital, inadequate interest coverage, and poor cash flow generation.

In highly turbulent market conditions, VMSSF 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, VMSSF 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. 

Vortex Metals Inc.

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Vortex Metals Inc.

$ 0.02

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