Lowest EV/EBITDA Ratio in the Gold Industry Detected for Golden Star Resources (GSS, NEM, ABX)

Published on Fri, 01/18/2013 - 11:20
By Mallory Stone in Fast Lane, ABX, GSS, NEM, amex:gss, barrick gold, golden star resources, lowest ev/ebitda ratio, newmont mining, nyse:abx, nyse:nem

Below are the three companies in the Gold industry with the lowest enterprise value to EBITDA (EV/EBITDA) ratios. EV/EBITDA is an important metric used in valuing comparable companies. It is capital structure neutral and generally the lower the ratio, the more undervalued the company is believed to be.

Golden Star Resources (AMEX:GSS) is lowest with an EV/EBITDA ratio of 4.15. Golden Star Resources Ltd. is a gold producer with an interest in the Bogoso gold mine in Ghana. The Company also has other gold and diamond exploration interests in Suriname, the Guiana Shield of South America, and West Africa. Golden Star Resources has traded 317,000 shares thus far today, vs. average volume of 1.7 million shares per day. The stock has underperformed the Dow (-1.1% to the Dow's -0.0%) and underperformed the S&P 500 (-1.1% to the S&P's -0.2%) during today's trading.

Following is Newmont Mining (NYSE:NEM) with an EV/EBITDA ratio of 6.01.

Finishing up the bottom three is Barrick Gold (NYSE:ABX), with an EV/EBITDA ratio of 6.11.

By Mallory Stone
mstone@fnno.com

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