Barrick Gold Corporation Stock Downgraded (ABX)

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.

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

• EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:

• The gross profit margin for BARRICK GOLD CORP is rather high; currently it is at 51.10%. 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 18.00% compares favorably to the industry average.
• Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 34.48%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 54.41% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
• Net operating cash flow has declined marginally to $1,732.00 million or 8.31% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

.

Barrick Gold Corporation engages in the production and sale of gold and copper. The company has a portfolio of 27 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, below the S&P 500 P/E ratio of 17.7. Barrick has a market cap of $33.29 billion and is part of the basic materials sector and metals & mining industry. Shares are down 26.5% year to date as of the close of trading on Monday.

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

-- Written by a member of TheStreet Ratings Staff

FREE for a limited time only: Get TheStreet Ratings #1 Stock Report NOW!.

 

For more information on Barrick Gold Corporation click any of the following:

• Barrick Gold Corporation Stock Price

• Barrick Gold Corporation Analyst Ratings

• Barrick Gold Corporation Key Stats & Profile

• Barrick Gold Corporation Earnings

• Barrick Gold Corporation Ratio Comparison

• Barrick Gold Corporation Growth Rates

• Barrick Gold Corporation Balance Sheet

• Barrick Gold Corporation Cash Flow

• Barrick Gold Corporation Income Statement