Eldorado Gold Corp Stock Downgraded (EGO)

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NEW YORK ( TheStreet) -- Eldorado Gold (NYSE: EGO) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

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Highlights from the ratings report include:
  • 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 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 significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 698.0% when compared to the same quarter one year ago, falling from $114.98 million to -$687.55 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.
  • Net operating cash flow has significantly decreased to $47.57 million or 60.81% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, ELDORADO GOLD CORP has marginally lower results.
  • The share price of ELDORADO GOLD CORP has not done very well: it is down 21.42% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

Eldorado Gold Corporation, together with its subsidiaries, engages in the exploration, development, mining, and production of gold properties in Turkey, China, Greece, Brazil, and Romania. The company also explores for iron, silver, lead, zinc, and copper ores. Eldorado has a market cap of $5.02 billion and is part of the basic materials sector and metals & mining industry. Shares are up 23.2% year to date as of the close of trading on Monday.

You can view the full Eldorado Ratings Report or get investment ideas from our investment research center.

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