Osisko Development (TSXV:ODV) Valuation Check After Completing A Major Follow On Equity Offering

Osisko Development (TSXV:ODV) has completed a follow on equity offering, raising about $125.00094 million by issuing 35,311,000 common shares at $3.54 each, at a discount of $0.1593 per share.

See our latest analysis for Osisko Development.

The follow on offering comes after a period of strong short term share price momentum, with a 1 day share price return of 7.16% and a 90 day share price return of 9.53%. However, the 1 year total shareholder return of 134.12% contrasts with weaker 3 and 5 year total shareholder returns.

If this capital raise has you thinking about where the next mining opportunities might be, it could be worth scanning 21 elite gold producer stocks as a starting list of potential ideas.

So with fresh capital raised, a 1 year total return above 100%, but weaker 3 and 5 year records and ongoing losses, is Osisko Development still mispriced, or is the market already factoring in future growth?

Preferred Price-to-Book of 2.7x: Is It Justified?

On a simple yardstick like P/B, Osisko Development is priced at 2.7x, while the last close sits at CA$4.94 and the stock has already had a strong 1 year run.

P/B compares the company’s market value to its book value, which can be a common reference point for early stage or asset heavy miners where earnings are still negative. For Osisko Development, the 2.7x multiple sits below the Canadian Metals and Mining industry average of 3.5x, and well below the 27.2x peer average cited, which suggests the market is attaching a lower valuation to each dollar of net assets than it does to many peers.

Relative to those benchmarks, the current P/B looks restrained rather than stretched. The gap to both the industry and peer averages is substantial, and if sentiment or expectations were to align more closely with those groups, the multiple has room to move toward those levels instead of away from them.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-book of 2.7x (UNDERVALUED)

However, the company is still loss making, with CA$250.827 million in net losses and weak 3 and 5 year total returns, which could challenge the current valuation story.

Find out about the key risks to this Osisko Development narrative.

Build Your Own Osisko Development Narrative

If you see the numbers differently or prefer to test your own assumptions, you can build and stress test a custom view in just a few minutes by starting with Do it your way.

A great starting point for your Osisko Development research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If you are serious about building a stronger portfolio, do not stop with just one stock. Use targeted stock lists to pressure test and broaden your thinking.

This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com