Eldorado Gold (EGO) Showing Signs Of A Dead Cat Bounce Today

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 or Stephanie Link.

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 $50.0 million.
  • EGO has traded 176,580 shares today.
  • EGO is up 3.9% today.
  • EGO was down 6.5% yesterday.

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More details on EGO:

Eldorado Gold Corporation, together with its subsidiaries, is engaged in the exploration, discovery, development, production, and reclamation of gold properties in Brazil, China, Greece, Turkey, and Romania. The company also explores for iron, silver, lead, zinc, and copper ores. The stock currently has a dividend yield of 0.3%. Currently there are 7 analysts that rate Eldorado Gold a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Eldorado Gold has been 5.5 million shares per day over the past 30 days. Eldorado has a market cap of $4.5 billion and is part of the basic materials sector and metals & mining industry. Shares are up 16% year-to-date as of the close of trading on Tuesday.

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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 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.

Highlights from the ratings report include:
  • ELDORADO GOLD CORP's earnings per share declined by 40.0% 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 significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 45.6% when compared to the same quarter one year ago, falling from $36.41 million to $19.79 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 on the basis of return on equity, ELDORADO GOLD CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The share price of ELDORADO GOLD CORP has not done very well: it is down 11.27% 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. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Net operating cash flow has decreased to $92.19 million or 23.34% when compared to the same quarter last year. Despite a decrease in cash flow ELDORADO GOLD CORP is still fairing well by exceeding its industry average cash flow growth rate of -55.48%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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