EV/EBITDA 2.6 based on H1 EBITDA of $59.8mil & $310.96mil EVIt seems that EV/EBITDA has become a popular metric, so I thought this might be worth sharing:
EV quoted is from goldsilverdata.com as $310.96mil [the EV, is calculated as the company’s total market capitalization and preferred shares and debt, minus total cash]
EBITDA is calculated from reported H1 2016 EBITDA of $29.9mil x2 to produce an estimated EBITDA for the full year.
According to Investopedia: "
EV/EBITDA value below 10 is commonly interpreted as healthy and above average by analysts and investors. As of 2015, the average EV/EBITDA value for the overall market is 14.7"
So the 2.6 EV/EBITDA of GCM is almost four times as good as what is considered "healthy and above average
EBITDA was $11.6 million in Q1 and $18.3 million in Q2. Almost all of that H1 result was accomplished at gold prices lower than today's $1,270. The trend is clearly upward for the EBITDA so far in 2016. The EV is being chipped away by retiring debt and/or building up the cash reserves required to retire the debt. So despite recent weakness in gold, the EV/EBITDA should be improving. The numerator should be shrinking & the denominator growing over time.
But at 2.6 EV/EBITDA it's already very cheap.
-GLTA!