GSS Investment Analysis Report & Stock Research, Golden Star Resources Ltd.

GSS Revenue

For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at GSS through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 8.14x and 3.07x respectively.

Utilizing this range we can see that GSS’s current Price to Sales per share ratio of 2.26x is significantly below its average levels historically. In fact, with a current price of $3.52, GSS is a full 60% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for GSS.

GSS Cash Earnings

Cash Earnings is always one of the most important factors to review for a company and, more importantly, an investment in a stock. GSS is significantly below its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 9 years of cash earnings levels for GSS to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 41.88 and a 20.69 low over the same period.

Now that GSS’s current price is $3.52 and its Price to Cash Earnings ratio is 6.90, we are very positive on its outlook from the cash earnings perspective. In fact, GSS is now trading a full 78% below its average historical Price to Cash Earnings ratio at these profit per share levels. When our clients ask us why GSS has great long term potential, the Cash Earnings levels to current stock is one of our primary reasons. But naturally, now we need for the overall market to recognize this disparity.

GSS Dividends

A strong dividend payment history is looked upon as a favorable characteristic on a company’s future and potentially can receive a positive Ockham rating. That being said, we don't require dividend payments for company's whose management has elected to forgo them entirely. GSS may pay a dividend at this time; however, there is an insufficient amount of history to incorporate it into our analysis. Therefore, we are not utilizing the dividends or lack thereof in our study. As GSS more consistent dividend history is made available, we will begin to factor this into the Ockham approach.