NEW YORK (TheStreet) -- Shares of Gold Fields (GFI) - Get Gold Fields Ltd. Report are gaining by 6.83% to $2.97 in late morning trading on Wednesday, as gold mining stocks get a boost from the increase in the price of the precious metal.
Gold for December delivery is up by 0.92% to $1,127.20 per ounce on the COMEX this morning.
Gold prices are trading higher as investors are seeking out safe haven assets amid concern of the health of China's economy, The Wall Street Journal reports.
The metal will often attract buyers in times of financial, social, or political unrest as it is seen as an effective way to ward off risk.
"Gold seems to be attracting safe-haven buying as concerns about emerging market currencies and broader markets seem to be on the rise," William Adams, head of research at Fastmarkets, said in a note, according to The Journal.
Separately, TheStreet Ratings team rates GOLD FIELDS LTD as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate GOLD FIELDS LTD (GFI) 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 unimpressive growth in net income, poor profit margins and weak operating cash flow."
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 4533.3% when compared to the same quarter one year ago, falling from -$0.30 million to -$13.90 million.
- The gross profit margin for GOLD FIELDS LTD is currently lower than what is desirable, coming in at 33.77%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.27% is significantly below that of the industry average.
- Net operating cash flow has decreased to $150.20 million or 24.10% when compared to the same quarter last year. Despite a decrease in cash flow GOLD FIELDS LTD is still fairing well by exceeding its industry average cash flow growth rate of -43.14%.
- 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 on the basis of return on equity, GOLD FIELDS LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.
- Despite currently having a low debt-to-equity ratio of 0.56, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
- You can view the full analysis from the report here: GFI Ratings Report