Eldorado Gold (EGO) Stock Declines Today as Gold Prices Fall

NEW YORK (TheStreet) -- Shares of Eldorado Gold  (EGO) fell 6.47% to $5.99 in afternoon trading Monday as gold prices declined.

Gold futures fell 1.27%, or $15.50, to $1,207 an ounce at 2:21 p.m., according to CNBC.

Gold futures are heading for their longest slump in five weeks amid concerns that the Federal Reserve could soon increase U.S. interest rates, which would hurt demand for gold as another investment choice, according to Bloomberg.

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The Fed is scheduled to meet on Tuesday and Wednesday to discuss increasing borrowing costs after it had maintained its benchmark rate near 0% since 2008.

Gold prices fell 8.4% in the third quarter.

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 some concerns, 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, disappointing return on equity and weak operating cash flow."

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

  • 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 underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • 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 of 23.34%, ELDORADO GOLD CORP is in line with the industry average cash flow growth rate of -29.96%.
  • EGO, with its decline in revenue, underperformed when compared the industry average of 3.5%. Since the same quarter one year prior, revenues slightly dropped by 8.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: EGO Ratings Report

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