Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
NEW YORK (
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and generally higher debt management risk.
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Highlights from the ratings report include:
- Net operating cash flow has slightly increased to $319.00 million or 4.93% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -34.94%.
- 36.60% is the gross profit margin for ANGLOGOLD ASHANTI LTD which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, AU's net profit margin of 0.07% is significantly lower than the industry average.
- The debt-to-equity ratio of 1.15 is relatively high when compared with the industry average, suggesting a need for better debt level management.
- 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, ANGLOGOLD ASHANTI LTD's return on equity significantly trails that of both the industry average and the S&P 500.
AngloGold Ashanti Limited engages in the exploration, production, and marketing of gold. It also produces by-products, such as silver, uranium, and sulfuric acid. Anglogold Ashanti has a market cap of $7.24 billion and is part of the basic materials sector and metals & mining industry. Shares are up 55% year to date as of the close of trading on Tuesday.
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