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TheStreet Open House

Will Newmont Mining (NEM) Stock Gain As CEO Again Seeks Barrick Gold (ABX) Merger?

NEW YORK (TheStreet) -- Newmont Mining Corp. (NEM) CEO Gary Goldberg said today that he was open to resuming discussions about a potential merger with Barrick Gold Corp. (ABX) but had not heard from the company since April, Reuters reports.

Merger talks between the global gold miners descended into acrimony in April, with Barrick and Newmont publicly accusing each other of scuppering a deal favored by many investors, Reuters said..

Shares of Newmont Mining are slightly lower in morning trade.

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TheStreet Ratings team rates NEWMONT MINING CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate NEWMONT MINING CORP (NEM) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • NEM has underperformed the S&P 500 Index, declining 16.97% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Metals & Mining industry average, but is greater than that of the S&P 500. The net income increased by 108.7% when compared to the same quarter one year prior, rising from -$2,059.00 million to $180.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, NEWMONT MINING CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • NEM, with its decline in revenue, underperformed when compared the industry average of 0.2%. Since the same quarter one year prior, revenues fell by 12.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • NEM's debt-to-equity ratio of 0.66 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. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.01 is sturdy.
  • You can view the full analysis from the report here: NEM Ratings Report

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