Rating Change #8
Coeur D'Alene Mines Corporation
has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.
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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 230.4% when compared to the same quarter one year prior, rising from $11.36 million to $37.55 million.
- 48.00% is the gross profit margin for COEUR D'ALENE MINES CORP which we consider to be strong. Regardless of CDE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CDE's net profit margin of 18.23% significantly outperformed against the industry.
- CDE's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.79 is somewhat weak and could be cause for future problems.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, COEUR D'ALENE MINES CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- CDE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 36.01%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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, CDE is still more expensive than most of the other companies in its industry.
Coeur d'Alene Mines Corporation, through its subsidiaries, engages in the ownership, operation, exploration, and development of silver and gold mining properties primarily in South America, Mexico, the United States, and Australia. The company has a P/E ratio of 25, above the S&P 500 P/E ratio of 17.7. Coeur D'Alene Mines has a market cap of $1.22 billion and is part of the basic materials sector and metals & mining industry. Shares are down 43.6% year to date as of the close of trading on Friday.
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