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Trade-Ideas: Barrick Gold Corporation (ABX) Is Today's Pre-Market Laggard Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Barrick Gold Corporation ( ABX) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Barrick Gold Corporation as such a stock due to the following factors:

  • ABX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $324.8 million.
  • ABX traded 76,428 shares today in the pre-market hours as of 8:40 AM.
  • ABX is down 3.3% today from Friday's close.

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More details on ABX:

Barrick Gold Corporation engages in the production and sale of gold and copper. It is also involved in exploration and mine development activities. The stock currently has a dividend yield of 1.1%. Currently there are 3 analysts that rate Barrick Gold Corporation a buy, no analysts rate it a sell, and 16 rate it a hold.

The average volume for Barrick Gold Corporation has been 18.5 million shares per day over the past 30 days. Barrick has a market cap of $18.6 billion and is part of the basic materials sector and metals & mining industry. Shares are down 47% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Barrick Gold Corporation as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • BARRICK GOLD CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, BARRICK GOLD CORP swung to a loss, reporting -$0.60 versus $4.48 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 1187.0% when compared to the same quarter one year ago, falling from $787.00 million to -$8,555.00 million.
  • The debt-to-equity ratio of 1.17 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, ABX maintains a poor quick ratio of 0.74, which illustrates the inability to avoid short-term cash problems.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, BARRICK GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 54.75%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1105.00% 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.

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