TSC Ratings' Updates: Massey

The following ratings changes were generated on Wednesday, Oct. 29.

We've downloaded Barrick Gold(ABX Quote), which engages in the acquisition, exploration, and development of gold properties, from buy to hold. Strengths include its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Revenue rose by 19.8% since the same quarter one year prior but significantly trailed the industry average of 81.1%. Barrick's debt-to-equity ratio is very low at 0.27 and is currently below that of the industry average, implying very successful management of debt levels. The company also maintains an adequate quick ratio of 1.46, which illustrates the ability to avoid short-term cash problems. The gross profit margin is rather high at 51.9%, having increased from the same quarter the previous year. Net profit margin of 24.70% trails the industry average.

Net income increased by 22.5% over the same quarter a year ago, to $485 million, outperforming the S&P 500 but underperforming the metals and mining industry. Shares are down 52.66%, worse than the S&P 500, which could make the stock attractive down the road. However, at this time we believe it is too soon to buy.

We've downgraded Corn Products International(CPO Quote), which manufactures and markets food ingredients and industrial products derived from wet milling and processing of corn and other starch-based materials, from buy to hold. Strengths include its impressive record of earnings per share growth, compelling growth in net income and robust revenue growth. Weaknesses include weak operating cash flow, a generally disappointing performance in the stock itself and poor profit margins.