NEW YORK (TheStreet) -- Allied Nevada Gold Corp
(ANV - Get Report) shares continued to drop, falling 3% to $3.87 in trading on Tuesday.
The gold and silver producer's stock has been in a free fall since more allegations emerged that the company had failed to inform investors of potential manufacturing issues.
Those issues have led to increased production costs and a reduction of the company's revenue guidance, according to some shareholders.
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Multiple lawsuits having already been brought over the previous three months.
"On August 6, 2013, Allied Nevada announced weaker-than-expected second quarter earnings, first half production and sales, along with higher-than-expected costs, and a reduction of its 2013 production and sales guidance," the firm said.
"It also announced that it was deferring construction of its Hycroft mill, primarily due to the inability of the company's operations to generate adequate cash flow. According to the complaint, all of the foregoing were attributable in whole or in part to the poor performance at the Company's Lewis leach pad," the statement concluded. TheStreet Ratings team rates ALLIED NEVADA GOLD CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation: "We rate ALLIED NEVADA GOLD CORP (ANV) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ANV's revenue growth has slightly outpaced the industry average of 7.9%. Since the same quarter one year prior, revenues slightly increased by 8.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to -$18.46 million or 26.07% when compared to the same quarter last year. In addition, ALLIED NEVADA GOLD CORP has also vastly surpassed the industry average cash flow growth rate of -39.72%.
- ANV's debt-to-equity ratio of 0.77 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. Despite the fact that ANV's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.59 is low and demonstrates weak liquidity.
- ALLIED NEVADA GOLD CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, ALLIED NEVADA GOLD CORP reported lower earnings of $0.01 versus $0.52 in the prior year. For the next year, the market is expecting a contraction of 3300.0% in earnings (-$0.32 versus $0.01).
- 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 203.1% when compared to the same quarter one year ago, falling from $16.12 million to -$16.61 million.
- You can view the full analysis from the report here: ANV Ratings Report