NEW YORK (TheStreet) -- IAMGOLD (IAG) - Get IAMGOLD Corporation Report stock is increasing by 4.81% to $1.96 in early afternoon trading on Thursday, as the price of gold continues to climb following the release of the Fed's July minutes yesterday.
Gold for December delivery is up 2.01% to $1,150.60 per ounce on the COMEX this afternoon, after hitting a one-month high on Wednesday, Reuters reports.
The uptick in gold prices follows yesterday's release of the Fed's July minutes, which revealed that the central bank has yet to decide whether to increase interest rates in September.
An interest rate hike would weigh on the price of gold, as it would decrease the desirability of holding a non-interest bearing asset.
IAMGOLD is a mid-tier mining company based in Toronto, Canada.
Separately, TheStreet Ratings team rates IAMGOLD CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate IAMGOLD CORP (IAG) 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 poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for IAMGOLD CORP is currently lower than what is desirable, coming in at 28.30%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.69% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to $31.70 million or 67.25% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- IAG'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 52.73%, 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.
- The change in net income from the same quarter one year ago has significantly exceeded that of the Metals & Mining industry average, but is less than that of the S&P 500. The net income has decreased by 23.1% when compared to the same quarter one year ago, dropping from -$16.00 million to -$19.70 million.
- 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, IAMGOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: IAG Ratings Report