NEW YORK (TheStreet) -- Shares of Allied Nevada Gold Corp. (ANV) are falling 5.15% to $1.57 on heavy trading volume as gold sinks following data that showed the U.S. economy expanded more than forecast, Reuters reports.
Gold, which hit a 15-month low of $1,183.46 earlier this month, fell 1.3% on Wednesday after the Fed statement was released, according to Reuters.
"Gold dipped further on the stronger-than-expected GDP print and weekly claims for jobless benefits," BMO Capital Markets director Tai Wong told Bloomberg.
Allied Nevada Gold is a gold and silver producer focused on mining, development, and exploration of properties in Nevada.
Allied Nevada Gold will report third quarter earnings on November 3.
Separately, TheStreet Ratings team rates ALLIED NEVADA GOLD CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ALLIED NEVADA GOLD CORP (ANV) a SELL. This is driven by some concerns, 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 disappointing return on equity, poor profit margins, feeble growth in its earnings per share, generally high debt management risk and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, ALLIED NEVADA GOLD CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for ALLIED NEVADA GOLD CORP is currently lower than what is desirable, coming in at 33.39%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.26% significantly trails the industry average.
- ALLIED NEVADA GOLD CORP reported flat earnings per share in the most recent quarter. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, ALLIED NEVADA GOLD CORP reported lower earnings of $0.01 versus $0.52 in the prior year. For the next year, the market is expecting a contraction of 2850.0% in earnings (-$0.28 versus $0.01).
- ANV's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 43.80%, which is also worse than the performance of the S&P 500 Index. 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.
- ANV's debt-to-equity ratio of 0.73 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.15 is very low and demonstrates very weak liquidity.
- You can view the full analysis from the report here: ANV Ratings Report