Eldorado Gold Corporation (EGO) A Stock to Buy on Insider Confidence?

The Eldorado Gold Corporation (NYSE:EGO) bulls won the day, but the reality is that the 0.22 points or 5.57 percent advance gave very little definitive technical indication of where the stock could be headed next. On 05 February, the shares traded at $4.17 with a heavy trade volume of 2.619 million shares. After opening the session at $3.91, the shares went as high as $4.185 and as low as $3.89, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $660 million and now has 158.33 million shares outstanding. Eldorado Gold Corporation (EGO) stock has gained 27.52 percent of market value in 21 trading days.

EGO stock has a trailing 3-year beta of 1.35, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$1.04 a share in the trailing twelve months. The stock’s value has surged 44.79 percent year to date (YTD) against a decline of -31.64 percent in 12 month’s time. The company’s shares still trade -34.84 percent away from its 1-year high of $6.40 and 65.48 percent up from 52-week low of $2.52. The average consensus rating on the company is 3, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a hold.

Eldorado Gold Corporation (EGO) will probably climb -52.52 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $9.5 price as 12-month high target. This represents a whopping 127.82 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $5.5, which represents a return potential of 31.89 percent when compared to the closing price of the stock of $4.17 on Tuesday, February 05. The lowest price target for the stock is $3.94 — slightly more than -5.52 percent from EGO’s current share price.

History has shown that shares in Eldorado Gold Corporation have gone down on 23 different earnings reaction days and are predicted to add 0.03 percent when the company reports upcoming earnings. Investors will get their next glimpse of EGO’s Q4 earnings on February 22. Analysts are forecasting revenue to suffer decline of -2 percent to $112M in the fiscal fourth quarter, while earnings are seen soaring by nearly 0 percent to $0.01 per share. It earned $0 per share, worse than the $0.01, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $81.07M, worse than the $111M analysts expected. Earnings are estimated to increase by -41.9 percent this year, 66.7 percent next year and continue to increase by 5 percent annually for the next 5 years.

The stock is currently hovering around the first support level of $3.98. Below this, the next support is placed in the zone of $3.79. Till the time, the EGO stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 78.3 on daily chart, which may remain a cause for concern. If the price breaks below $3.79 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $4.27 mark may result into a pull-back move towards $4.38 level.

Further, it is sporting a 1.41 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1. 20.9 percent is the gross profit margin for Eldorado Gold Corporation and operating margin sits at -32.4 percent. Along with this, the net profit margin is -35.2 percent.