NEW YORK (TheStreet) -- Shares of Eldorado Gold (EGO) - Get Eldorado Gold Corporation Report fell 6.19% to $6.15 in afternoon trading Thursday as gold prices declined to less than $1,200 an ounce for the first time since October 3.
Gold for December delivery sank 2.2% to $1,198.60 an ounce. The decline stemmed partially from the Federal Reserve's announcement that it would end its QE3 bond buying program.
The news that the Fed had nixed the stimulus program indicated its confidence in the recovery of the U.S. economy, which grew 3.5% in the third quarter thanks to an increase in exports and federal spending.
More than 6.1 million shares had changed hands as of 2:48 p.m., compared to the average volume of 4,484,050.
Separately, TheStreet Ratings team rates ELDORADO GOLD CORP as a "sell" with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ELDORADO GOLD CORP (EGO) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ELDORADO GOLD CORP's earnings per share declined by 16.7% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, ELDORADO GOLD CORP swung to a loss, reporting -$0.91 versus $0.45 in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Metals & Mining industry average. The net income has decreased by 13.0% when compared to the same quarter one year ago, dropping from $43.27 million to $37.63 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, ELDORADO GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- EGO, with its decline in revenue, slightly underperformed the industry average of 0.7%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The gross profit margin for ELDORADO GOLD CORP is rather high; currently it is at 53.85%. Regardless of EGO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 14.17% trails the industry average.
- You can view the full analysis from the report here: EGO Ratings Report