IAMGOLD (IAG) Stock Rises on Soaring Gold Prices
NEW YORK (TheStreet) -- IAMGOLD (IAG) - Get Report stock is surging by 4.76% to $1.54 in mid-afternoon trading on Thursday, amid rising gold prices.
The price of the precious metal is recovering due to traders closing out their positions or bargain-hunting, the Wall Street Journal reports.
Gold prices are expected to decline further if the Federal Reserve raises interest rates. The Federal Open Market Committee released its October minutes yesterday, which supported a gradual increase in rates, Bloomberg reported.
Gold for December delivery was up by 1.22% to $1081.70 per ounce on the COMEX this afternoon.
IAMGOLD is a gold mining company based in Toronto.
Separately, TheStreet Ratings team rates IAMGOLD CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
We rate IAMGOLD CORP (IAG) a SELL. This is driven by multiple 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 poor profit margins, 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 gross profit margin for IAMGOLD CORP is rather low; currently it is at 23.27%. It has decreased from the same quarter the previous year.
- Net operating cash flow has significantly decreased to $9.80 million or 91.50% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- IAG has underperformed the S&P 500 Index, declining 24.09% 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 change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Metals & Mining industry average. The net income has decreased by 15.6% when compared to the same quarter one year ago, dropping from -$72.50 million to -$83.80 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, IAMGOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: IAG
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.