Eldorado Gold Corp (EGO) Turned Red on Monday

NEW YORK (TheStreet) -- Eldorado Gold Corp (EGO) was one of the biggest losers in an industry-wide sell-off in the gold mining industry after gold prices tumbled to their lowest levels since July.

The Vancouver-based gold miner shed 7.5% to $5.65, adding to the company's year-to-date losses of 56.1%.

Gold prices were lower after November manufacturing data came in at the highest levels since mid-2011, sparking concerns the Federal Reserve would begin tapering monetary stimulus. By late afternoon, bullion was selling 2.3% lower to $1,219.71 an ounce.

Others affected included Yamana Gold (AUY), Silver Wheaton Corp (SLW) and Barrick Gold (ABX).

Gold investments have become unfavorable over the year as low inflation created an adverse environment and investors shirked precious metals for more preferable equities. Year to date, the SPDR Gold Trust  (GLD) has dropped 27.4% and the iShares Gold Trust  (IAU) has fallen 27.3%, while the S&P 500 climbed 26.6%.

TheStreet Ratings team rates Eldorado Gold Corp as a Hold with a ratings score of C. The team has this to say about their recommendation:

"We rate Eldorado Gold Corp (EGO) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 1.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • EGO's debt-to-equity ratio is very low at 0.10 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • The gross profit margin for Eldorado Gold Corp is rather high; currently it is at 57.96%. 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 12.67% trails 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. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, Eldorado Gold Corp reported lower earnings of 45 cents a share vs. 59 cents a share in the prior year.
  • 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 52% when compared to the same quarter one year ago, falling from $75.85 million to $36.41 million.
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