AC Investment Research

SMT:TSX Sierra Metals Inc. Research Report

Outlook: Sierra Metals Inc. is assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Hold
Time series to forecast n: 18 Jan 2023 for (n+1 year)
Methodology : Transductive Learning (ML)

Abstract

Sierra Metals Inc. prediction model is evaluated with Transductive Learning (ML) and Pearson Correlation1,2,3,4 and it is concluded that the SMT:TSX stock is predictable in the short/long term. According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Hold

Key Points

  1. Trust metric by Neural Network
  2. Which neural network is best for prediction?
  3. What is the use of Markov decision process?

SMT:TSX Target Price Prediction Modeling Methodology

We consider Sierra Metals Inc. Decision Process with Transductive Learning (ML) where A is the set of discrete actions of SMT:TSX stock holders, F is the set of discrete states, P : S × F × S → R is the transition probability distribution, R : S × F → R is the reaction function, and γ ∈ [0, 1] is a move factor for expectation.1,2,3,4


F(Pearson Correlation)5,6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Transductive Learning (ML)) X S(n):→ (n+1 year) i = 1 n a i

n:Time series to forecast

p:Price signals of SMT:TSX stock

j:Nash equilibria (Neural Network)

k:Dominated move

a:Best response for target price

 

For further technical information as per how our model work we invite you to visit the article below: 

How do AC Investment Research machine learning (predictive) algorithms actually work?

SMT:TSX Stock Forecast (Buy or Sell) for (n+1 year)

Sample Set: Neural Network
Stock/Index: SMT:TSX Sierra Metals Inc.
Time series to forecast n: 18 Jan 2023 for (n+1 year)

According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Hold

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

IFRS Reconciliation Adjustments for Sierra Metals Inc.

  1. If a financial asset contains a contractual term that could change the timing or amount of contractual cash flows (for example, if the asset can be prepaid before maturity or its term can be extended), the entity must determine whether the contractual cash flows that could arise over the life of the instrument due to that contractual term are solely payments of principal and interest on the principal amount outstanding. To make this determination, the entity must assess the contractual cash flows that could arise both before, and after, the change in contractual cash flows. The entity may also need to assess the nature of any contingent event (ie the trigger) that would change the timing or amount of the contractual cash flows. While the nature of the contingent event in itself is not a determinative factor in assessing whether the contractual cash flows are solely payments of principal and interest, it may be an indicator. For example, compare a financial instrument with an interest rate that is reset to a higher rate if the debtor misses a particular number of payments to a financial instrument with an interest rate that is reset to a higher rate if a specified equity index reaches a particular level. It is more likely in the former case that the contractual cash flows over the life of the instrument will be solely payments of principal and interest on the principal amount outstanding because of the relationship between missed payments and an increase in credit risk. (See also paragraph B4.1.18.)
  2. However, in some cases, the time value of money element may be modified (ie imperfect). That would be the case, for example, if a financial asset's interest rate is periodically reset but the frequency of that reset does not match the tenor of the interest rate (for example, the interest rate resets every month to a one-year rate) or if a financial asset's interest rate is periodically reset to an average of particular short- and long-term interest rates. In such cases, an entity must assess the modification to determine whether the contractual cash flows represent solely payments of principal and interest on the principal amount outstanding. In some circumstances, the entity may be able to make that determination by performing a qualitative assessment of the time value of money element whereas, in other circumstances, it may be necessary to perform a quantitative assessment.
  3. The expected credit losses on a loan commitment shall be discounted using the effective interest rate, or an approximation thereof, that will be applied when recognising the financial asset resulting from the loan commitment. This is because for the purpose of applying the impairment requirements, a financial asset that is recognised following a draw down on a loan commitment shall be treated as a continuation of that commitment instead of as a new financial instrument. The expected credit losses on the financial asset shall therefore be measured considering the initial credit risk of the loan commitment from the date that the entity became a party to the irrevocable commitment.
  4. In accordance with paragraph 4.1.3(a), principal is the fair value of the financial asset at initial recognition. However that principal amount may change over the life of the financial asset (for example, if there are repayments of principal).

*International Financial Reporting Standards (IFRS) adjustment process involves reviewing the company's financial statements and identifying any differences between the company's current accounting practices and the requirements of the IFRS. If there are any such differences, neural network makes adjustments to financial statements to bring them into compliance with the IFRS.

Conclusions

Sierra Metals Inc. is assigned short-term Ba1 & long-term Ba1 estimated rating. Sierra Metals Inc. prediction model is evaluated with Transductive Learning (ML) and Pearson Correlation1,2,3,4 and it is concluded that the SMT:TSX stock is predictable in the short/long term. According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Hold

SMT:TSX Sierra Metals Inc. Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementB3Baa2
Balance SheetCC
Leverage RatiosCB2
Cash FlowBaa2C
Rates of Return and ProfitabilityCaa2Ba3

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

Prediction Confidence Score

Trust metric by Neural Network: 81 out of 100 with 677 signals.

References

  1. Athey S, Mobius MM, Pál J. 2017c. The impact of aggregators on internet news consumption. Unpublished manuscript, Grad. School Bus., Stanford Univ., Stanford, CA
  2. J. N. Foerster, Y. M. Assael, N. de Freitas, and S. Whiteson. Learning to communicate with deep multi-agent reinforcement learning. In Advances in Neural Information Processing Systems 29: Annual Conference on Neural Information Processing Systems 2016, December 5-10, 2016, Barcelona, Spain, pages 2137–2145, 2016.
  3. V. Borkar. Stochastic approximation: a dynamical systems viewpoint. Cambridge University Press, 2008
  4. H. Khalil and J. Grizzle. Nonlinear systems, volume 3. Prentice hall Upper Saddle River, 2002.
  5. Christou, C., P. A. V. B. Swamy G. S. Tavlas (1996), "Modelling optimal strategies for the allocation of wealth in multicurrency investments," International Journal of Forecasting, 12, 483–493.
  6. E. Collins. Using Markov decision processes to optimize a nonlinear functional of the final distribution, with manufacturing applications. In Stochastic Modelling in Innovative Manufacturing, pages 30–45. Springer, 1997
  7. Cheung, Y. M.D. Chinn (1997), "Further investigation of the uncertain unit root in GNP," Journal of Business and Economic Statistics, 15, 68–73.
Frequently Asked QuestionsQ: What is the prediction methodology for SMT:TSX stock?
A: SMT:TSX stock prediction methodology: We evaluate the prediction models Transductive Learning (ML) and Pearson Correlation
Q: Is SMT:TSX stock a buy or sell?
A: The dominant strategy among neural network is to Hold SMT:TSX Stock.
Q: Is Sierra Metals Inc. stock a good investment?
A: The consensus rating for Sierra Metals Inc. is Hold and is assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of SMT:TSX stock?
A: The consensus rating for SMT:TSX is Hold.
Q: What is the prediction period for SMT:TSX stock?
A: The prediction period for SMT:TSX is (n+1 year)

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