Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified

Eldorado Gold

(

EGO

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Eldorado Gold as such a stock due to the following factors:

  • EGO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.9 million.
  • EGO has traded 214,526 shares today.
  • EGO is up 6.1% today.
  • EGO was down 5.5% yesterday.

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More details on EGO:

Eldorado Gold Corporation, together with its subsidiaries, engages in the exploration, discovery, development, production, and reclamation of gold properties, primarily in Brazil, China, Greece, Turkey, and Romania. It also explores for iron, silver, lead, zinc, and copper ores. The stock currently has a dividend yield of 0.5%. EGO has a PE ratio of 36. Currently there are 5 analysts that rate Eldorado Gold a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Eldorado Gold has been 3.5 million shares per day over the past 30 days. Eldorado has a market cap of $2.3 billion and is part of the basic materials sector and metals & mining industry. Shares are down 45.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Eldorado Gold as a

sell

. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 126.4% when compared to the same quarter one year ago, falling from $31.27 million to -$8.24 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 57.98%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 125.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, ELDORADO GOLD CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • 47.33% is the gross profit margin for ELDORADO GOLD CORP which we consider to be strong. 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, EGO's net profit margin of -3.45% significantly underperformed when compared to the industry average.
  • ELDORADO GOLD CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, ELDORADO GOLD CORP turned its bottom line around by earning $0.14 versus -$0.91 in the prior year.

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