Iamgold Corp Stock Downgraded (IAG)

NEW YORK (TheStreet) -- Iamgold (NYSE:IAG) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:

• IAG's revenue growth has slightly outpaced the industry average of 1.9%. Since the same quarter one year prior, revenues slightly increased by 4.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
• IAG has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.64, which clearly demonstrates the ability to cover short-term cash needs.
• 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, IAMGOLD CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
• Net operating cash flow has declined marginally to $204.77 million or 7.47% when compared to the same quarter last year. Despite a decrease in cash flow IAMGOLD CORP is still fairing well by exceeding its industry average cash flow growth rate of -47.79%.
• Looking at the price performance of IAG's shares over the past 12 months, there is not much good news to report: the stock is down 43.21%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, IAG is still more expensive than most of the other companies in its industry.

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IAMGOLD Corporation, a mid-tier gold mining company, engages in the exploration, development, and production of mineral resource properties. It primarily explores for gold, silver, zinc, copper, niobium, diamonds, and other metals. The company has a P/E ratio of 11.1, above the average metals & mining industry P/E ratio of 5.4 and below the S&P 500 P/E ratio of 17.7. Iamgold has a market cap of $4.33 billion and is part of the basic materials sector and metals & mining industry. Shares are down 29.3% year to date as of the close of trading on Tuesday.

You can view the full Iamgold Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet Ratings Staff

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