NEW YORK (TheStreet) -- Shares of IAMGOLD Corp. (IAG) - Get IAMGOLD Corporation Report are down 1.51% to $2.61 today with gold prices seeing their sharpest drop in more than a year Thursday, as investors interpreted the Federal Reserve's comments from a day before to be on the hawkish side, denting the case for owning the precious metal, the Wall Street Journal reports.
Gold futures for April delivery fell 2.32% to $1,257.40 a troy ounce at 3:19 p.m. on the COMEX division of the New York Mercantile Exchange.
The Federal Reserve signaled it would keep short-term interest rates near zero at least until midyear, the Journal noted.
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"Gold investors have had an unpleasant awakening," RBC Capital Markets Global Futures SVP George Gero told the Journal, adding "the digestion of Wednesday's statement tells you the Fed will be data driven, and that helps the hawkish cause."
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 multiple 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 feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- IAMGOLD CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, IAMGOLD CORP swung to a loss, reporting -$2.21 versus $0.89 in the prior year.
- 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 386.6% when compared to the same quarter one year ago, falling from $25.30 million to -$72.50 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, IAMGOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for IAMGOLD CORP is currently lower than what is desirable, coming in at 34.55%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -21.22% is significantly below that of the industry average.
- The share price of IAMGOLD CORP has not done very well: it is down 24.33% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- You can view the full analysis from the report here: IAG Ratings Report