BUY HOLD SELL A+ A A- B+ B B- C+ C C- D+ D D- E+ E E- F BUSINESS DESCRIPTION Randgold Resources Limited explores for and develops gold deposits in Sub-Saharan Africa. STOCK PERFORMANCE (%) 3 Mo. 1 Yr. 3 Yr (Ann) Price Change -9.94 27.65 12.36 GROWTH (%) Last Qtr 12 Mo. 3 Yr CAGR Revenues -0.64 17.15 4.31 Net Income -25.71 31.66 1.79 EPS -26.09 31.11 1.27 RETURN ON EQUITY (%) Ind Avg S&P 500 Q3 2017 7.74 5.81 13.41 Q3 2016 6.25-2.35 11.79 Q3 2015 6.00-0.12 12.91 P/E COMPARISON Sub-Industry: December 3, 2017 BUY BUY RATING SINCE 02/07/2017 TARGET PRICE $105.98 Weekly Price: (US$) SMA (50) SMA (100) 1 Year 2 Years Rating History HOLD BUY HOLD BUY Volume in Millions 2016 2017 COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History TARGET PRICE $105.98 130 120 110 100 90 80 70 60 50 10 5 0 31.11 31.80 Ind Avg 25.45 S&P 500 RECOMMENDATION We rate () a BUY. This is driven by some important positives, which we believe should have a greater impact than any nesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income. EPS ANALYSIS¹ ($) HIGHLIGHTS 's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Q1 0.51 Q2 0.57 Q3 0.45 2015 Q4 0.47 Q1 0.57 Q2 0.52 Q3 0.69 2016 NA = not available NM = not meaningful Q4 0.83 Q1 0.73 Q2 0.88 Q3 0.51 2017 1 Compustat fiscal year convention is used for all fundamental data items. The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500. Compared to its closing price of one year ago, 's share price has jumped by 27.65%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels. 's earnings per share declined by 26.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, increased its bottom line by earning $2.61 versus $2.00 in the prior year. This year, the market expects an improvement in earnings ($2.98 versus $2.61). 49.64% is the gross profit margin for which we consider to be. Regardless of 's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, 's net profit margin of 16.34% compares favorably to the industry average. PAGE 1
PEER GROUP ANALYSIS REVENUE GROWTH AND EBITDA MARGIN* Revenue Growth (TTM) BVN -7.5% 17.5% IAG KGC AEM BTG ABX UNFAVORABLE 30% NEM GG EBITDA Margin (TTM) FAVORABLE FNV RGLD 80% Companies with higher EBITDA margins and revenue growth rates are outperforming companies with lower EBITDA margins and revenue growth rates. Companies for this scatter plot have a market capitalization between $2.5 Billion and $19.7 Billion. Companies with NA or NM values do not appear. *EBITDA Earnings Before Interest, Taxes, Depreciation and Amortization. REVENUE GROWTH AND EARNINGS YIELD Revenue Growth (TTM) BVN -7.5% 17.5% UNFAVORABLE -10% NEM Earnings Yield (TTM) FNV RGLD KGC AEM BTG GG FAVORABLE ABX IAG 25% Companies that exhibit both a high earnings yield and high revenue growth are generally more attractive than companies with low revenue growth and low earnings yield. Companies for this scatter plot have revenue growth rates between -5.9% and 17.1%. Companies with NA or NM values do not appear. INDUSTRY ANALYSIS The metals and mining industry is comprised of companies that engage in exploration, mine development, and ore mining. The industry includes precious metals mining for metals such as gold, silver, and platinum aluminum as well as companies mining or processing industrial metals such as steel, copper, & aluminum. The US is the largest producer of primary aluminum and the second largest producer of gold, exporting materials worth over $26 billion annually. According to recent estimates, there are more than 7000 metals and mining firms in the US. The industry is mature, cyclical, capital intensive and dominated by large companies. Fierce consolidation activity has been a key trend since 2005. Some of the major names in the industry are Alcoa Inc. (AA), Century Aluminum Co. (CENX), Kaiser Aluminum Corporation (KALU), Nucor Corporation (NUE), Cliffs Natural Resources Inc. (CLF), and Newmont Mining Corp. (NEM). The US steel industry is currently worth more than $50 billion with annual growth rates around 1% to 2%. Process chains are long with high production volumes. Recently, large quantities of low-cost imports have impeded growth. However, the industry has seen enhanced productivity, energy efficiency, and higher yield due to restructuring, downsizing, and widespread implementation of new technologies. In the coming years, overcapacity and price instability will remain critical issues. Efficient production, better-suited products, enhanced capacity utilization and environmentally friendly practices are vital factors to future success. The US is the largest producer of primary aluminum, exporting $39 billion annually. The aluminum sector is cyclical, mature, capital intensive, and geographically concentrated. Demand comes from transportation, packaging, consumer electronics, construction, aerospace and power companies. The industry is overtly responsive to economic conditions. Companies are responding to pricing pressures through consolidation and vertical integration, which is aimed at streamlining the supply chain. In the US, Nevada accounts for four-fifths of all domestic gold output. Domestic demand for gold has declined as retail jewelry sales have fallen sharply in recent years. However, higher consumption in emerging countries and increased investor demand for gold investment products like ETFs have helped bolster market prices. High gold prices have attracted new players and have prompted existing ones to expand. Future growth for the US metals and mining industry depends upon demand from BRIC nations, developing countries, and domestic consumers. The industry faces a number of challenges including environmental concerns, deteriorating ore grades, overproduction, technological changes, and the global economy. Intense competition from nations such as Canada, Russia, China and Mexico pose threats to the US mining industry because those nations have lower labor costs, lax environmental regulations and lower operating costs. Sustainability of high prices, resurgent global demand, particularly from the Asia-Pacific region, and signs of increasing industrial output across Europe and the United States may boost industry performance. PEER GROUP: Metals & Mining Recent Market Price/ Net Sales Net Income Ticker Company Name Price ($) Cap ($M) Earnings TTM ($M) TTM ($M) 91.76 8,638 31.11 1,307.99 281.08 RGLD ROYAL INC 82.72 5,414 53.71 435.34 100.37 KGC KINROSS CORP 4.16 5,188 41.60 3,395.50 111.30 BVN MINAS BUENAVENTURA SA 13.99 3,846 NM 1,190.88-353.35 IAG IAM CORP 5.43 2,524 4.98 1,056.30 514.00 BTG B2 CORP 2.54 2,483 254.00 645.88 33.19 NEM NEWMONT MINING CORP 36.99 19,728 246.60 7,202.00 85.00 ABX BARRICK CORP 13.78 16,067 7.41 8,465.00 2,177.00 FNV FRANCO-NEVADA CORP 81.15 15,072 102.72 662.90 146.70 GG CORP INC 12.64 11,216 20.72 3,468.00 517.00 AEM AGNICO EAGLE MINES LTD 43.71 10,154 37.36 2,176.56 271.44 The peer group comparison is based on Major Gold companies of comparable size. PAGE 2
COMPANY DESCRIPTION Randgold Resources Limited explores for and develops gold deposits in Sub-Saharan Africa. It holds interests in the Morila gold mine, the Loulo gold mine, and the Gounkoto gold mine, which are located in Mali, West Africa; Tongon mine situated within the Nielle exploitation permit in the north of Cote d'ivoire; and Kibali mine located in the Democratic Republic of Congo. The company was founded in 1995 and is based in St. Helier, the Channel Islands. Unity Chambers St. Helier JE24WJ JEY Phone: 44 1534 735 33 Fax: 44 1534 735 44 http://www.randgoldresources.com Employees: 4000 STOCK-AT-A-GLANCE Below is a summary of the major fundamental and technical factors we consider when determining our overall recommendation of shares. It is provided in order to give you a deeper understanding of our rating methodology as well as to paint a more complete picture of a stock's strengths and nesses. It is important to note, however, that these factors only tell part of the story. To gain an even more comprehensive understanding of our stance on the stock, these factors must be assessed in combination with the stock s valuation. Please refer to our Valuation section on page 5 for further information. FACTOR SCORE Growth 4.0 out of 5 stars Measures the growth of both the company's income statement and cash flow. On this factor, has a growth score better than 70% of the stocks we rate. Total Return 3.5 out of 5 stars Measures the historical price movement of the stock. The stock performance of this company has beaten 60% of the companies we cover. Efficiency 4.0 out of 5 stars Measures the strength and historic growth of a company's return on invested capital. The company has generated more income per dollar of capital than 70% of the companies we review. Price volatility 2.0 out of 5 stars Measures the volatility of the company's stock price historically. The stock is less volatile than 30% of the stocks we monitor. Solvency 5.0 out of 5 stars Measures the solvency of the company based on several ratios. The company is more solvent than 90% of the companies we analyze. Income 3.5 out of 5 stars Measures dividend yield and payouts to shareholders. The company's dividend is higher than 60% of the companies we track. THESTREET RATINGS RESEARCH METHODOLOGY TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to perform against a general benchmark of the equities market and interest rates. While our model is quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings. Objective elements include volatility of past operating revenues, financial strength, and company cash flows. Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings growth; and the financial strength of the underlying company as compared to its stock's valuation as compared to projected earnings growth; and the financial strength of the underlying company as compared to its stock's performance. These and many more derived observations are then combined, ranked, weighted, and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of selecting stocks. PAGE 3
Consensus EPS Estimates² ($) IBES consensus estimates are provided by Thomson Financial FINANCIAL ANALYSIS 's gross profit margin for the third quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. During the same period, stockholders' equity ("net worth") has increased by 6.21% from the same quarter last year. NA NA 2.98 E 2017(E) 3.96 E 2018(E) STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. To learn more visit www.thestreetratings.com. INCOME STATEMENT Net Sales ($mil) 298.09 300.00 EBITDA ($mil) 136.08 144.58 EBIT ($mil) 85.54 104.46 Net Income ($mil) 48.71 65.57 BALANCE SHEET Cash & Equiv. ($mil) 621.58 361.10 Total Assets ($mil) 4,181.34 3,918.08 Total Debt ($mil) 2.77 2.77 Equity ($mil) 3,628.07 3,415.68 PROFITABILITY Gross Profit Margin 49.64% 51.93% EBITDA Margin 45.65% 48.19% Operating Margin 28.70% 34.82% Sales Turnover 0.31 0.28 Return on Assets 6.72% 5.44% Return on Equity 7.74% 6.25% DEBT Current Ratio 5.86 4.20 Debt/Capital 0.00 0.00 Interest Expense NA NA Interest Coverage NA NA SHARE DATA Shares outstanding (mil) 94 94 Div / share 0.00 0.00 EPS 0.51 0.69 Book value / share 38.55 36.42 Institutional Own % NA NA Avg Daily Volume 441,036 589,797 2 Sum of quarterly figures may not match annual estimates due to use of median consensus estimates. PAGE 4
RATINGS HISTORY Our rating for has not changed since 2/7/2017. As of 11/30/2017, the stock was trading at a price of which is 15.3% below its 52-week high of $108.29 and 35.9% above its 52-week low of $67.54. 2 Year Chart HOLD: $60.60 BUY: $84.05 2016 HOLD: $84.70 BUY: $92.95 $125 $100 $75 MOST RECENT RATINGS CHANGES Date Price Action From To 2/7/17 $92.95 Upgrade Hold Buy 10/12/16 $84.70 Downgrade Buy Hold 2/9/16 $84.05 Upgrade Hold Buy 11/30/15 $60.60 No Change Hold Hold Price reflects the closing price as of the date listed, if available RATINGS DEFINITIONS & DISTRIBUTION OF THESTREET RATINGS (as of 11/30/2017) 44.19% Buy - We believe that this stock has the opportunity to appreciate and produce a total return of more than 10% over the next 12 months. 30.85% Hold - We do not believe this stock offers conclusive evidence to warrant the purchase or sale of shares at this time and that its likelihood of positive total return is roughly in balance with the risk of loss. 24.96% Sell - We believe that this stock is likely to decline by more than 10% over the next 12 months, with the risk involved too great to compensate for any possible returns. TheStreet Ratings 14 Wall Street, 15th Floor New York, NY 10005 www.thestreet.com Research Contact: 212-321-5381 Sales Contact: 866-321-8726 VALUATION BUY. The current P/E ratio indicates a discount compared to an average of 31.80 for the Metals & Mining industry and a premium compared to the S&P 500 average of 25.45. Conducting a second comparison, its price-to-book ratio of 2.38 indicates a discount versus the S&P 500 average of 3.24 and a premium versus the industry average of 1.87. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Price/Earnings 31.11 Peers 31.80 Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation. is trading at a valuation on par with its peers. Price/Projected Earnings 23.20 Peers 19.08 Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations. is trading at a significant premium to its peers. Price/Book 2.38 Peers 1.87 Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. is trading at a significant premium to its peers. Price/Sales 6.60 Peers 3.01 Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales. is trading at a significant premium to its industry. DISCLAIMER: Price/CashFlow 14.65 Peers 12.02 Premium. The P/CF ratio, a stock s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures. is trading at a premium to its peers. Price to Earnings/Growth 2.20 Peers 0.42 Premium. The PEG ratio is the stock s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples. trades at a significant premium to its peers. Earnings Growth lower higher 31.11 Peers 1467.24 Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. However, is expected to significantly trail its peers on the basis of its earnings growth rate. Sales Growth lower higher 17.15 Peers 21.85 Lower. A sales growth rate that trails the industry implies that a company is losing market share. trails its peers on the basis of sales growth The opinions and information contained herein have been obtained or derived from sources believed to be reliable, but TheStreet Ratings cannot guarantee its accuracy and completeness, and that of the opinions based thereon. Data is provided via the COMPUSTAT Xpressfeed product from Standard &Poor's, a division of The McGraw-Hill Companies, Inc., as well as other third-party data providers. TheStreet Ratings is a division of TheStreet, Inc., which is a publisher. This research report contains opinions and is provided for informational purposes only. You should not rely solely upon the research herein for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional, before you make any investment. None of the information contained in this report constitutes, or is intended to constitute a recommendation by TheStreet Ratings of any particular security or trading strategy or a determination by TheStreet Ratings that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. Your use of this report is governed by TheStreet, Inc.'s Terms of Use found at http://www.thestreet.com/static/about/terms-of-use.html. PAGE 5