Gold contracts for December delivery are up 0.57% to $1,139 an ounce on the Comex today, reversing yesterday's decline.
Prices for the yellow metal are rising as investors anticipate the Fed raising interest rates in the near future, according to the Wall Street Journal.
"Gold has been closely tracking changes in Fed policy expectations of late and we expect this influence on price action to continue up ahead," said a UBS analyst, according to the Journal.
A rise in U.S. interest rates would potentially spur an increase the value of the dollar, which would cause gold to fall as the commodity is priced in dollars.
TheStreet Ratings team rates GOLDCORP INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate GOLDCORP INC (GG) a SELL. This is driven by a few notable 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 disappointing return on equity and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market, GOLDCORP INC's return on equity significantly trails that of both the industry average and the S&P 500.
- GG'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 50.28%, 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.
- GOLDCORP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, GOLDCORP INC continued to lose money by earning -$2.68 versus -$3.30 in the prior year. This year, the market expects an improvement in earnings ($0.27 versus -$2.68).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 116.6% when compared to the same quarter one year prior, rising from $181.00 million to $392.00 million.
- 46.13% is the gross profit margin for GOLDCORP INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 32.99% significantly outperformed against the industry average.
- You can view the full analysis from the report here: GG Ratings Report