Is Grange Resources Limited’s (ASX:GRR) 24.01% ROE Good Enough...

Is Grange Resources Limited’s (ASX:GRR) 24.01% ROE Good Enough Compared To Its Industry?

https://simplywall.st/news/is-grang...-01-roe-good-enough-compared-to-its-industry/

This is an interesting article and shows a lot of value when you compare with nearly every miner except one that I know of.

"Grange Resources Limited (ASX:GRR) outperformed the steel industry on the basis of its ROE – producing a higher 24.01% relative to the peer average of 11.51% over the past 12 months. Though, the impressiveness of GRR’s ROE is contingent on whether this industry-beating level can be sustained."

Grange has done well by not taking on debt, but debt or in the case of Granges $200 million cash balance could produce a much higher ROE if the money was invested wisely. Unfortunately Grange's management have little vision. So safer to keep the money in the bank.

"Grange Resources Limited (ASX:GRR) is currently trading at a trailing P/E of 3.5x, which is lower than the industry average of 13.2x."

When compared with companies like Independence Group IGO you see just how undervalued Grange is.
IGO currently has a P/E of 42.55
"Based on the last twelve months, Independence Group’s P/E ratio is 42.55. That is equivalent to an earnings yield of about 2.4%."

Even worse is the ROE
"Our data shows Independence Group has a return on equity of 3.0% for the last year. One way to conceptualize this, is that for each A$1 of shareholders’ equity it has, the company made A$0.030 in profit."

"Since GRR’s P/E of 3.5x is lower than its industry peers (13.2x), it means that investors are paying less than they should for each dollar of GRR’s earnings. As such, our analysis shows that GRR represents an under-priced stock."

https://simplywall.st/stocks/au/mat...ources-limited-asxgrr-based-off-its-pe-ratio/