Kinross Gold (KGC) Stock Lower as Gold Prices Slip
NEW YORK (TheStreet) -- Shares of Kinross Gold (KGC) - Get Report are down by 2.50% to $1.75 in early afternoon trading on Thursday, as the decline in gold prices weighs on some stocks in the metals and mining sector today.
Kinross Gold is a Toronto-based senior gold mining company engaged in mining and related activities, which include the exploration for and acquisition of gold-bearing properties.
Gold for December delivery is shrinking by 0.40% to $1,080.60 per ounce on the COMEX this afternoon.
The price of the precious metal is being pressured by expectations for a U.S. interest rate hike in December.
"We expect prices to fall a little bit further because of the anticipated rate hike by the Fed in December," Capital Economics analyst Simona Gambarini told Reuters. "Prices could fall to $1,050 [per ounce] by the end of the year."
Gold struggles to compete against interest yielding assets when rates go up.
Separately, 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 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 deteriorating net income, disappointing return on equity and weak operating cash flow.
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 933.3% when compared to the same quarter one year ago, falling from -$5.10 million to -$52.70 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness 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.
- Net operating cash flow has decreased to $232.10 million or 23.39% 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 -55.30%.
- This stock's share value has moved by only 24.36% over the past year. 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.
- Despite the weak revenue results, KGC has significantly outperformed against the industry average of 45.4%. Since the same quarter one year prior, revenues fell by 14.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: KGC
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.