NEW YORK (

TheStreet

)

-- Gammon Gold

(NYSE:

GRS

) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:

  • 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, GAMMON GOLD INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • GAMMON GOLD INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, GAMMON GOLD INC swung to a loss, reporting -$1.07 versus $0.06 in the prior year.
  • Net operating cash flow has increased to $35.64 million or 12.79% when compared to the same quarter last year. Despite an increase in cash flow of 12.79%, GAMMON GOLD INC is still growing at a significantly lower rate than the industry average of 272.81%.
  • GRS's revenue growth trails the industry average of 32.7%. Since the same quarter one year prior, revenues slightly increased by 4.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Metals & Mining industry average. The net income increased by 71.8% when compared to the same quarter one year prior, rising from $13.65 million to $23.46 million.

Gammon Gold Inc., through its subsidiaries, engages in the acquisition, exploration, development, and mining of gold and silver deposits in Mexico. Gammon has a market cap of $1.3 billion and is part of the

basic materials

sector and

metals & mining

industry. Shares are up 23.3% year to date as of the close of trading on Wednesday.

You can view the full

Gammon Ratings Report

or get investment ideas from our

investment research center

.

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