There is no end to the downtrend of Eldorado Gold Corp. (EGO, Financial) on the New York Stock Exchange.
On Tuesday, the market trimmed the value of the stock in the Canadian producer by another 2.70%, shortly after the announcement of critical changes in the senior management of the company.
Timothy Garvin is now executive vice president and general counsel and Andor Lips is vice president of government relations in Europe. Both senior managers have multi-year experience in the sector.
The gold stock closed regular trading hours at $1.80 per share, just a whisper away from the 52-week low of $1.05 per share. Trading at a 71.4% discount of the 52-week high of $3.78 per share makes Eldorado Gold Corp one of the cheapest miners on sale in the gold stock industry. The low-entry point also tells that Eldorado Gold Corp has collapsed 65% for the 52-weeks through March 13 and missed the Van Eck Vectors Gold Miners (ETF) by about 64%.
Thanks to the chart powered by GuruFocus.com, which offers investors a wide range of features that can be used in their analysis on the stock, you can also see that Eldorado Gold Corp is below the 200, 100 and 50-SMA lines.
An additional proof of its competitive price is shown by the price-book ratio of 0.25 times, which is far below the industry median of 2.06 times.
That today Eldorado Gold can also be purchased at bargain is difficult to say. Only using and combining several metrics we could get close to a fair value of the stock. GuruFocus provides investors with a wide range of these metrics.
A good homework on this gold stock cannot be done regardless a time series analysis on another metric I usually employ when I screen for gold mining stocks. This metric is represented by the EV-to-Ebitda.
Source: GuruFocus.com
In the case of Eldorado Gold, as illustrated by the chart sourced by GuruFocus.com, the ratio went progressively down over time and is now below the average of the industry at 9.55 times versus 9.90 times.
It is also evident that this gold stock is vanishing in its attractiveness since fewer analysts are suggesting a buying investment approach.
Source: Yahoo Finance
The average recommendation rating is set at 3 (hold) of a fourteen 1.0 (strong buy) to 5 (sell) ranging estimates.
However, going against the grain is one of the virtues of the value investor who is seeking bargains among the gold mining companies, as well. Giving more portfolio space to Eldorado Gold Corp may mean investors lose out on more than an 80% profit. That is, if Wall Street gets it right.
The margin can be even more juicy if investors wait until the company announces fourth- quarter earnings for 2017. Eldorado had some problems with operations at one of its two core mines in Turkey. As a result, the company may miss predictions on earnings and revenue. Value investors understand that.
For the last quarter of fiscal 2017, consensus is for a 1-cent loss to 1-cent net profit per share of Eldorado Gold Corp on an average quarterly revenue of $95.56 million.
Also, with a relative strength Indicator (RSI-14 days) of 40.51, the oversold level has yet been reached.
During the last three months of 2017, Pioneer Investments opened a position on Eldorado Gold acquiring 1,769,042 shares. Ray Dalio and Ronald Muhlenkamp reduced theirs by 5.30% to 282,531 shares of Eldorado Gold Corp and by 9.49% to 70,000 shares.
Joel Greenblatt and Jim Simons sold out.
(Disclosure: I have no positions in any security mentioned in this article.)
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