Goldcorp (GG) Stock Stalling Today Amid Lower Gold Prices
NEW YORK (TheStreet) -- Shares of Goldcorp (GG) are stalling, down 3% to $21.32 in afternoon trading Monday, as gold prices trade in the red after hitting a two-week high. Gold is lower amid expectations for an interest rate hike later this year, Reuters reports.
U.S. gold futures for April delivery were trading down 0.4% to $1,208.30 an ounce as of 2 p.m. today, while spot gold was lower by 0.3% to $1,208.90 an ounce.
Earlier today, spot prices rose to $1,223.20 an ounce, the highest level since Feb. 17, following an interest rate cut in Beijing. The reduced rate lifted demand in China, which is the world's second largest gold market.
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Also, Goldcorp announced this morning its third monthly dividend payment for 2015 of 5 cents per share. Shareholders of record at the close of business on March 12, 2015 will be entitled to receive payment of this dividend on Friday, March 20.
The company reported its latest quarterly earnings results on Feb. 19. Goldcorp said that its fourth quarter loss more than doubled from last year, as it took a $2.3 billion impairment charge on its new Cerro Negro gold mine in Argentina.
For the fourth quarter, Goldcorp posted adjusted earnings of 7 cents per share on revenue of $835 million.
Canada-based Goldcorp is a gold producer engaged in the operation, exploration, development and acquisition of precious metal properties in Canada, the U.S., Mexico and Central and South America.
Separately, TheStreet Ratings team rates GOLDCORP INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate GOLDCORP INC (GG) a SELL. This is driven by a few notable 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. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 120.0% when compared to the same quarter one year ago, falling from -$1,089.00 million to -$2,396.00 million.
- The share price of GOLDCORP INC has not done very well: it is down 19.81% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
- Net operating cash flow has decreased to $274.00 million or 10.74% when compared to the same quarter last year. Despite a decrease in cash flow GOLDCORP INC is still fairing well by exceeding its industry average cash flow growth rate of -57.24%.
- 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, GOLDCORP INC's return on equity significantly trails that of both the industry average and the S&P 500.
- GG, with its decline in revenue, underperformed when compared the industry average of 2.5%. Since the same quarter one year prior, revenues fell by 13.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: GG Ratings Report