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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 largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.
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Highlights from the ratings report include:
- GORO's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GORO has a quick ratio of 2.08, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 98.82% to $12.35 million when compared to the same quarter last year. In addition, GOLD RESOURCE CORP has also vastly surpassed the industry average cash flow growth rate of -37.53%.
- The gross profit margin for GOLD RESOURCE CORP is rather high; currently it is at 54.35%. Regardless of GORO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GORO's net profit margin of 22.87% compares favorably to the industry average.
- 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 decreased by 3.5% when compared to the same quarter one year ago, dropping from $7.39 million to $7.13 million.
- 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 on the basis of return on equity, GOLD RESOURCE CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
Gold Resource Corporation is engaged in the exploration for and production of gold and silver in Mexico. The company also explores for copper, lead, and zinc. Gold Resource has a market cap of $265.5 million and is part of the basic materials sector and metals & mining industry. Shares are up 9.7% year to date as of the close of trading on Thursday.
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