Rating Change #1
Barrick Gold Corporation
(ABX - Get Report)
has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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Highlights from the ratings report include:
- Net operating cash flow has increased to $763.00 million or 10.57% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -27.30%.
- The gross profit margin for BARRICK GOLD CORP is rather high; currently it is at 53.20%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, ABX's net profit margin of 22.90% compares favorably to the industry average.
- Despite the weak revenue results, ABX has outperformed against the industry average of 15.3%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.56, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.71 is weak.
Barrick Gold Corporation engages in the production and sale of gold and copper. The company has a portfolio of 26 operating mines, and exploration and development projects located in North America, South America, the Australia Pacific region, and Africa. The company has a P/E ratio of 9.9, equal to the average metals & mining industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Barrick has a market cap of $40.51 billion and is part of the
metals & mining
industry. Shares are down 11.3% year to date as of the close of trading on Thursday.
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Barrick Ratings Report
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Editor's Note: 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.