Saxo Bank’s head of FX strategy John Hardy takes a closer look at how global currencies are being affected by developments in the US - China trade war.
Article / 10 June 2014 at 8:33 GMT

Eldorado Gold tops list of hot North American equities

Head of Equity Strategy / Saxo Bank
By Peter Garnry

Today we are focusing on our top 10 equity picks in North America. Half of the names are readily recognised, such as Netflix, Facebook, Celgene, Biogen and Keurig Green Mountain. But the top spot is held by Eldorado Gold with a 12-month return forecast of 23 percent (see table). Please note that the uncertainty indicator is minus 5, indicating that our model has a significantly lower forecast than the consensus which is currently 34 percent.

North America equities top picks

Is gold mining making a comeback?

Most investors will likely be surprised to see a gold mining company at the top of our list given the 33 percent fall in the price of gold since its 2011 peak. Eldorado Gold is a Canadian gold miner with 54 percent of revenue coming from Turkey and 37 percent from China. The miner has a very competitive cost level with the cash cost at USD 577 per ounce in Q1 compared to an average realised selling price of USD 1,299. As a result, Eldorado runs a 43 percent EBITDA margin.

Eldorado Gold is not particularly cheap, trading at a 12-month forward EV/EBITDA of 10.1 which is slightly above the market's average. Current expectations are looking for flat revenue growth this year so the investment case is built on stabilising gold prices, new capacity coming online this year and continued cost management leading to attractive shareholder returns.


 Eldorado Gold's mine at Jinfeng, China. Photo: Company archives

Peter Garnry is head of equity strategy at Saxo Bank. Click here for more of his articles.

— Edited by Clare MacCarthy
Download document

Quant Corner - North America equities


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail