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Allied Nevada Gold Corp Stock Downgraded (ANV)

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

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 68.9% when compared to the same quarter one year prior, rising from $3.64 million to $6.14 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 1.6%. Since the same quarter one year prior, revenues slightly increased by 0.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ANV's debt-to-equity ratio of 0.80 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 13.75 is very high and demonstrates very strong liquidity.
  • Net operating cash flow has significantly decreased to -$12.28 million or 400.98% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Allied Nevada Gold Corp., together with its subsidiaries, engages in the evaluation, acquisition, exploration, and advancement of gold exploration and development projects. The company has a P/E ratio of 49.8, below the average metals & mining industry P/E ratio of 52.7 and above the S&P 500 P/E ratio of 17.7. Allied Nevada has a market cap of $2.51 billion and is part of the basic materials sector and metals & mining industry. Shares are down 7.8% year to date as of the close of trading on Thursday.

You can view the full Allied Nevada Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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