Are Harte Gold Corp. (TSX:HRT) and Golden Star Resources Ltd. (TSX:GSC) Fairly Valued?

Harte Gold Corp. (TSX:HRT) currently has a Value Composite score of 82.  Similarly, the Value Composite Two (VC2) is calculated with the same ratios, but adds the Shareholder Yield.  The Value Composite Two of Harte Gold Corp. (TSX:HRT) is 87.

Technicals

Investors may be trying to figure out how much risk they are able to handle with their current stock holdings. Taking on too much risk can put unnecessary weight on the shoulders of even the sturdiest investors. On the flip side, investors who play it too safe may be shaking their heads and wondering what might have been. Finding that delicate risk balance can turn out to be the difference between sinking and swimming in the equity markets. It is highly important for investors to understand exactly what risks they are taking when buying and selling stocks. Knowing these risks may help avoid disaster down the line. Once the risk is calculated, investors should have an easier go at narrowing in on finding the right stocks to add to the portfolio. 

In taking a look at some other notable technicals, Harte Gold Corp. (TSX:HRT)’s ROIC is -0.048380. The ROIC 5 year average is -0.037082 and the ROIC Quality ratio is 1.941954. ROIC is a profitability ratio that measures the return that an investment generates for those providing capital. ROIC helps show how efficient a firm is at turning capital into profits.

We also note that Harte Gold Corp. (TSX:HRT) has a Shareholder Yield of -0.428863 and a Shareholder Yield (Mebane Faber) of -0.45581. The first value is calculated by adding the dividend yield to the percentage of repurchased shares. The second value adds in the net debt repaid yield to the calculation. Shareholder yield has the ability to show how much money the firm is giving back to shareholders via a few different avenues. Companies may issue new shares and buy back their own shares. This may occur at the same time. Investors may also use shareholder yield to gauge a baseline rate of return.

Harte Gold Corp. (TSX:HRT) has a current MF Rank of 11045. Developed by hedge fund manager Joel Greenblatt, the intention of the formula is to spot high quality companies that are trading at an attractive price. The formula uses ROIC and earnings yield ratios to find quality, undervalued stocks. In general, companies with the lowest combined rank may be the higher quality picks.

We can now take a quick look at some historical stock price index data. Harte Gold Corp. (TSX:HRT) presently has a 10 month price index of 2.48000. The price index is calculated by dividing the current share price by the share price ten months ago. A ratio over one indicates an increase in share price over the period. A ratio lower than one shows that the price has decreased over that time period. Looking at some alternate time periods, the 12 month price index is 2.38462, the 24 month is 9.53846, and the 36 month is 2.17544. Narrowing in a bit closer, the 5 month price index is 1.24000, the 3 month is 0.98413, and the 1 month is currently 0.92537.

The C-Score is a system developed by James Montier that helps determine whether a company is involved in falsifying their financial statements.  The C-Score is calculated by a variety of items, including a growing difference in net income verse cash flow, increasing days outstanding, growing days sales of inventory, increasing assets to sales, declines in depreciation, and high total asset growth.  The C-Score of Harte Gold Corp. (TSX:HRT) is -1.00000.  The score ranges on a scale of -1 to 6.  If the score is -1, then there is not enough information to determine the C-Score.  If the number is at zero (0) then there is no evidence of fraudulent book cooking, whereas a number of 6 indicates a high likelihood of fraudulent activity. The C-Score assists investors in assessing the likelihood of a company cheating in the books.

Taking a look at valuation rankings for Golden Star Resources Ltd. (TSX:GSC), we see that the stock has a Value Composite score of 43. Adding a sixth ratio, shareholder yield, we can view the Value Composite 2 score which is currently sitting at 56.

Individual investors might be digging a little deeper into the playbook in order to create a winning plan for the remainder of the calendar year. The diligent investor typically has a portfolio that is diversified and ready to encounter any unforeseen market action. Even after creating the well-planned portfolio with expected returns, nobody can be absolutely sure that those returns will be seen. Setting realistic expectations can help the investor from becoming discouraged if the original plan runs into a bit of a snag. Of course every investor would like to enter the stock market and see sizeable profits right off the bat. This may only be wishful thinking for investors who aren’t ready to put in the time and energy to make sure the overall strategy stays on track and the portfolio stays properly managed.

Technicals at a Glance
In taking a look at some other notable technicals, Golden Star Resources Ltd. (TSX:GSC)’s ROIC is 0.032897. The ROIC 5 year average is -0.213324 and the ROIC Quality ratio is 0.593374. ROIC is a profitability ratio that measures the return that an investment generates for those providing capital. ROIC helps show how efficient a firm is at turning capital into profits.

There are many different tools to determine whether a company is profitable or not.  One of the most popular ratios is the “Return on Assets” (aka ROA).  This score indicates how profitable a company is relative to its total assets.  The Return on Assets for Golden Star Resources Ltd. (TSX:GSC) is -0.022691.  This number is calculated by dividing net income after tax by the company’s total assets.  A company that manages their assets well will have a higher return, while a company that manages their assets poorly will have a lower return.

Shareholder Yield
We also note that Golden Star Resources Ltd. (TSX:GSC) has a Shareholder Yield of -0.330869 and a Shareholder Yield (Mebane Faber) of -0.04939. The first value is calculated by adding the dividend yield to the percentage of repurchased shares. The second value adds in the net debt repaid yield to the calculation. Shareholder yield has the ability to show how much money the firm is giving back to shareholders via a few different avenues. Companies may issue new shares and buy back their own shares. This may occur at the same time. Investors may also use shareholder yield to gauge a baseline rate of return.

Golden Star Resources Ltd. (TSX:GSC) has a current MF Rank of 9210. Developed by hedge fund manager Joel Greenblatt, the intention of the formula is to spot high quality companies that are trading at an attractive price. The formula uses ROIC and earnings yield ratios to find quality, undervalued stocks. In general, companies with the lowest combined rank may be the higher quality picks.

Price Index
We can now take aquick look at some historical stock price index data. Golden Star Resources Ltd. (TSX:GSC) presently has a 10 month price index of 0.88462. The price index is calculated by dividing the current share price by the share price ten months ago. A ratio over one indicates an increase in share price over the period. A ratio lower than one shows that the price has decreased over that time period. Looking at some alternate time periods, the 12 month price index is 0.92929, the 24 month is 3.11864, and the 36 month is 1.58621. Narrowing in a bit closer, the 5 month price index is 0.83636, the 3 month is 0.98925, and the 1 month is currently 1.12195.

The Piotroski F-Score is a scoring system between 1-9 that determines a firm’s financial strength.  The score helps determine if a company’s stock is valuable or not.  The Piotroski F-Score of Golden Star Resources Ltd. (TSX:GSC) is 5.  A score of nine indicates a high value stock, while a score of one indicates a low value stock.  The score is calculated by the return on assets (ROA), Cash flow return on assets (CFROA), change in return of assets, and quality of earnings.  It is also calculated by a change in gearing or leverage, liquidity, and change in shares in issue.  The score is also determined by change in gross margin and change in asset turnover.

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