Yamana Gold (AUY) Stock Soaring Today as Gold Gains

Yamana Gold (AUY) stock is up as the price of gold rallys today.
By Amanda Schiavo ,

NEW YORK (TheStreet) -- Shares of Yamana Gold Inc. (AUY) - Get Report are higher by 5.80% to $3.92 in late morning trading on Friday, as some stocks within the mining sector get a push into the green today resulting from the rise in the price of gold.

Gold for April delivery is up by 1.08% to $1,181.60 per ounce on the COMEX this morning.

The precious metal is getting a boost from the decline in the dollar, which is lower by 0.78% according to the Wall Street Journal dollar index.

The decline in the dollar and "focus in Europe turning back from its political problems to the [European Central Bank] stimulus rollout" is helping to drive the price of the precious metal higher, CMC Markets said in an analyst note, MarketWatch reports.

Gold has been on the rise for the past two trading sessions. On Wednesday afternoon a statement following the Fed meeting was believed by many to mean that the Fed would not be raising interest rates as quickly as previously expected.

Additionally, Yamana Gold was upgraded to "overweight" from "neutral" at HSBC on Friday. The firm cited valuation and a manageable debt profile as reasons for the ratings change.

Separately, TheStreet Ratings team rates YAMANA GOLD INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate YAMANA GOLD INC (AUY) 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. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally high debt management risk."

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 132.7% when compared to the same quarter one year ago, falling from -$583.89 million to -$1,358.57 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, YAMANA GOLD INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for YAMANA GOLD INC is currently extremely low, coming in at 2.08%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, AUY's net profit margin of -250.22% significantly underperformed when compared to the industry average.
  • Net operating cash flow has declined marginally to $183.13 million or 0.92% when compared to the same quarter last year. Despite a decrease in cash flow YAMANA GOLD INC is still fairing well by exceeding its industry average cash flow growth rate of -47.05%.
  • Despite currently having a low debt-to-equity ratio of 0.31, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.33 is very low and demonstrates very weak liquidity.
  • You can view the full analysis from the report here: AUY Ratings Report
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