U.S. gold futures for June delivery were up 0.9% to $1,204.20 an ounce on Friday afternoon after rising as high as $1,211 an ounce earlier in the day.
Gold prices were rising as investors doubt the Federal Reserve will raise interest rates in the next few months, according to the Wall Street Journal. Some investors believe data the U.S. will report weak economic numbers next week when it reports industrial production and manufacturing data, according to the Journal.
If the Federal Reserve does not raise interest rates gold could benefit, as the precious metal struggles to compete with yield-bearing investments in higher interest rate environments.
Barrick Gold is a gold producer that operates mines in the United States, Australia, Papua New Guinea, Chile, Argentina, and other countries.
TheStreet Ratings team rates BARRICK GOLD CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate BARRICK GOLD CORP (ABX) 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 weak operating cash flow, generally disappointing historical performance in the stock itself and generally high debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly decreased to $371.00 million or 63.48% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The debt-to-equity ratio of 1.28 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, ABX's quick ratio is somewhat strong at 1.30, demonstrating the ability to handle short-term liquidity needs.
- ABX'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 32.87%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
- The change in net income from the same quarter one year ago has significantly exceeded that of the Metals & Mining industry average, but is less than that of the S&P 500. The net income has decreased by 0.7% when compared to the same quarter one year ago, dropping from -$2,830.00 million to -$2,851.00 million.
- 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, BARRICK GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: ABX Ratings Report