Kinross Gold (KGC) Stock Is Down Today as Gold Prices Fall
NEW YORK (TheStreet) -- Shares of Kinross Gold (KGC) - Get Report were falling 4.9% to $2.23 Tuesday afternoon after gold prices fell to a 4-month low earlier in the day.
Spot gold prices were down 0.6% to $1,146.90 an ounce on the Comex early Tuesday afternoon after falling to $1,142.86 an ounce earlier in the day, its lowest price since Nov. 7, 2014.
Gold Prices were falling due to investors' concerns over the Federal Reserve policy meeting that will being later on Tuesday, according to Reuters. Many analysts expect the Federal Reserve to remove a "patient" reference from its policy statement, which could bring it closer to raising interest rates, according to Reuters.
"We do you expect gold to fall further if the Fed removes the word 'patient' from their statement and the trading action could be very volatile for investors," AvaTrade Chief Market Analyst Naeem Aslam told Reuters. Aslam added that the low price for gold could be around $1,058 an ounce.
TheStreet Ratings team rates KINROSS GOLD CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate KINROSS GOLD CORP (KGC) a SELL. This is driven by a number of negative factors, 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 against the S&P 500 and did not exceed that of the Metals & Mining industry. The net income has significantly decreased by 66.4% when compared to the same quarter one year ago, falling from -$742.10 million to -$1,235.10 million.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 52.33%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 98.46% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- Net operating cash flow has declined marginally to $176.30 million or 3.97% when compared to the same quarter last year. Despite a decrease in cash flow KINROSS GOLD CORP is still fairing well by exceeding its industry average cash flow growth rate of -47.05%.
- 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, KINROSS GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 18.9%. Since the same quarter one year prior, revenues slightly dropped by 9.8%. 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: KGC Ratings Report