Kinross Gold (KGC) Stock Slipping as Gold Prices Decline - TheStreet

NEW YORK (TheStreet) -- Shares of Kinross Gold (KGC) - Get Report are down by 1.43% to $2.07 on Friday afternoon, as some stocks within the metals and mining sector fall as a result of the decline in gold prices.

Kinross Gold is a Toronto-based senior gold mining company that also explores for and acquires gold-bearing properties.

On Wednesday, a statement was released by a Federal Open Market Committee meeting suggesting it is likely that interest rates will increase in December, the Wall Street Journal reports.

Higher interest rates can weigh on gold as the precious metal pays no interest to those that hold it.

Gold for December delivery is slipping by 0.59% to $1,140.50 per ounce on the COMEX this afternoon.

Other gold producing stocks trading lower today include Barrick Gold (ABX), Goldcorp (GG), Yamana Gold (AUY) and Newmont Mining (NEM).

Separately, TheStreet Ratings team rates KINROSS GOLD CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate KINROSS GOLD CORP (KGC) 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 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:

  • 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 288.7% when compared to the same quarter one year ago, falling from $44.10 million to -$83.20 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, KINROSS GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for KINROSS GOLD CORP is currently lower than what is desirable, coming in at 29.56%. It has decreased significantly from the same period last year.
  • The share price of KINROSS GOLD CORP has not done very well: it is down 19.07% 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. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Despite the weak revenue results, KGC has outperformed against the industry average of 46.5%. Since the same quarter one year prior, revenues fell by 17.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: KGC