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Why Allied Nevada Gold (ANV) Stock Is Down Today

NEW YORK (TheStreet) -- Allied Nevada Gold (ANV) continued to drop on Monday as more allegations emerge of possible securities fraud claims. 

By early afternoon, shares had taken off 6.6% to $3.39.

After market close last week, Frank & Bianco LLP announced it was investigating possible claims against Allied Nevada Gold on behalf of shareholders of record between January 18 and August 5, 2013. 

"The investigation concerns possible violations of the federal securities laws related to materially false and misleading statements or omissions of material information during the Class Period, regarding the concealment that certain equipment crucial to the Company's mining efforts suffered from serious, ongoing defects and deficiencies," the legal firm said in a statement. 

Earlier in the month, Cohen Milstein Sellers & Toll PLLC brought announced the launch of a similar investigation into the company.

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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 7.6%. 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 -39.42%.
  • 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 4050.0% in earnings (-$0.40 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.
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