Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+ . The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.
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Highlights from the ratings report include:
- NEWMONT MINING CORP 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, NEWMONT MINING CORP increased its bottom line by earning $3.78 versus $1.03 in the prior year. This year, the market expects an improvement in earnings ($4.15 versus $3.78).
- 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 165.5% when compared to the same quarter one year prior, rising from -$1,028.00 million to $673.00 million.
- NEM, with its decline in revenue, slightly underperformed the industry average of 6.5%. Since the same quarter one year prior, revenues fell by 10.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Net operating cash flow has declined marginally to $842.00 million or 8.67% when compared to the same quarter last year. Despite a decrease in cash flow NEWMONT MINING CORP is still fairing well by exceeding its industry average cash flow growth rate of -44.49%.
- NEM'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 27.10%, 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. 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.
Newmont Mining Corporation, together with its subsidiaries, engages in the acquisition, exploration, and production of gold and copper properties. The company's assets or operations are located in the United States, Australia, Peru, Indonesia, Ghana, Mexico, and New Zealand. Newmont has a market cap of $19.69 billion and is part of the basic materials sector and metals & mining industry. The company has a P/E ratio of 10.6, below the S&P 500 P/E ratio of 17.7. Shares are down 13.1% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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