Centerra Gold Inc (CGAU, Financial), a prominent player in the metals and mining industry, has recently witnessed a notable surge in its stock price. Over the past week, the company's stock has increased by 3.58%, and over the last three months, it has seen an impressive 20.93% rise. Currently, Centerra Gold boasts a market capitalization of $1.5 billion, with its stock price standing at $7.01. This significant uptick in stock value is particularly interesting when considering the company's valuation metrics.
Valuation Insights
The GF Value, which is a measure of a stock's intrinsic value, is currently pegged at $10.48 for CGAU. This is a decrease from the $10.85 GF Value recorded three months ago. Despite these fluctuations, both the current and past GF Valuations categorize the stock as significantly undervalued. This suggests that the recent price increase could still present a potential investment opportunity, as the stock might still be trading below its fair value.
Introduction to Centerra Gold Inc
Centerra Gold Inc is a gold mining and exploration company with operations and projects spread across Asia, North America, and other global markets. The company's diversified operations include the Kumtor Gold Project in the Kyrgyz Republic, the Oksut Project in Turkey, and the Mount Milligan Mine in North America. Additionally, Centerra manages a molybdenum segment in North America, focusing on processing facilities and maintenance activities.
Profitability Analysis
Centerra Gold's Profitability Rank stands at 6/10, indicating a relatively strong position within the industry. The company's Operating Margin is 16.80%, which is superior to 80.89% of its peers. Additionally, its Return on Equity (ROE) and Return on Assets (ROA) are 3.51% and 2.67% respectively, both metrics outperforming a large majority of competitors. The Return on Invested Capital (ROIC) at 4.42% further underscores the company's efficient use of capital. Over the past decade, Centerra has maintained profitability for five years, better than 68.53% of its industry counterparts.
Growth Trajectory
The Growth Rank of Centerra is currently at 4/10. The company has demonstrated a robust 29.40% three-year revenue growth rate per share, ranking better than 81.57% of companies in its industry. However, its future revenue growth estimates show a decline of 1.23% over the next 3 to 5 years. The EPS growth rates have also seen declines, with a three-year rate at -39.00% and a five-year rate at -31.70%. These figures highlight some challenges in maintaining earnings growth moving forward.
Investor Holdings
Notable investors in Centerra Gold include Donald Smith & Co, holding 10,747,290 shares, representing 4.99% of the company's stock. Jim Simons and Azvalor Managers FI (Trades, Portfolio) also hold significant positions, with 254,200 and 99,430 shares respectively. These investments reflect a strong confidence among seasoned investors in the potential of CGAU.
Competitive Landscape
Centerra operates in a competitive environment with close rivals such as Dundee Precious Metals Inc (TSX:DPM, Financial), New Gold Inc (TSX:NGD, Financial), and Artemis Gold Inc (TSXV:ARTG, Financial), all of which have similar market capitalizations ranging from $1.43 billion to $1.54 billion. This competitive analysis is crucial for understanding Centerra's position within the industry.
Conclusion
In summary, Centerra Gold Inc's current market position and valuation suggest a potentially undervalued stock with robust profitability metrics. However, the company faces challenges in sustaining its growth trajectory, as indicated by its future revenue and EPS estimates. For investors, these factors, combined with the strong backing from notable holders and a competitive standing in the industry, present a mixed but intriguing investment landscape.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
