NEW YORK (TheStreet) -- Shares of Goldcorp (GG) are down by 0.37% to $12.16 in early afternoon trading on Wednesday, as some mining and related stocks take a hit from the decline in the price of gold.
The price of the precious metal is slipping on a strong dollar and gains in the U.S. stock market, MarketWatch reports.
"The dollar's rise has been a wrecking ball for commodity-sensitive assets this year," Warwick Valley Financial Advisors president Ken Ford told MarketWatch.
Goldcorp is a Vancouver-based gold producer that acquires, explores for, develops and operates gold properties in Canada, the U.S., Mexico and Central and South America.
Gold for December delivery is down by 1.12% to $1,114.20 per ounce on the COMEX this afternoon.
Additionally, gold is also taking a hit from positive data out of the U.S. which signaled to investors that an interest rate hike could come before the end of the year, the Wall Street Journal reports.
Separately, 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 number of negative factors, 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 42.59%, 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 ($0.21 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.
- You can view the full analysis from the report here: GG