Is Goldcorp’s Stock a Good Buy Now?

E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio for Goldcorp is not only strong, but stronger than competitors. The balance sheet isn’t spectacular, but it’s in good shape. A balance sheet in plus territory definitely helps put an investor at ease.

Debt-To-Equity

Cash

Long-Term Debt

GG

.03

$894 Million

$771 Million

ABX

.50

$2.53 Billion

$13.94 Billion

KGC

.16

$2.15 Billion

$2.12 Billion

 

T = Technicals on the Stock Chart Are Poor

Goldcorp has not performed well over the past three years, especially considering the price of gold. Then again, not many miners have performed well during this time period. This is at a time when the Federal Reserve has embarked on an unprecedented quantitative easing campaign that has sent gold to the stratosphere. The Federal Reserve has guaranteed that low interest rates will remain low until 2015, which should mean a continued rally in gold. However, QE1 had a massive impact, QE2 had a large impact, and every manipulative attempt since then has only had a marginal impact on the price of gold as well as other commodities. This likely means a top is forming. For example, gold is only up 7.8% this year.

Two of Goldcorp’s competitors, Barrick Gold Corporation (NYSE:ABX) and Kinross Gold Corporation (NYSE:KGC), have also performed poorly over the past three years.

1 Month

Year-To-Date

1 Year

3 Year

GG

-14.49%

-15.31%

-26.49%

-10.11%

ABX

-4.26%

-24.78%

-32.29%

-18.63%

KGC

3.25%

-15.17%

-28.94%

-52.14%

 

At $36.97, Goldcorp is currently trading significantly lower than its 50-day SMA of $42.95. It’s trading moderately lower than its 100-day SMA of $40.91. And it’s trading moderately lower than its 200-day SMA of $40.78.

 E = Earnings Are Steady and Revenue Is Impressive

Goldcorp’s revenue growth has been superb over the past five years. Earnings haven’t been quite as impressive.  

2007

2008

2009

2010

2011

Revenue ($)in billions

2.207

2.420

2.724

3.800

5.362

Diluted EPS ($)

.65

2.06

.33

2.12

2.18

 

Quarterly revenue and earnings also look good. Notice the YoY improvement.

9/2011

12/2011

3/2012

6/2012

9/2012

Revenue ($)in billions

1.308

1.515

1.349

1.113

1.538

Diluted EPS ($)

.41

.39

.51

.26

.61