NEW YORK (TheStreet) -- Shares of Newmont Mining (NEM) - Get Newmont Goldcorp Corporation (NEM) Report are lower by 1.55% to $15.93 in late morning trading on Wednesday, as mining and related stocks tumble today due to the decline in the price of gold.
Prices are taking a hit from a stronger dollar and a reversal of losses in European shares as investors keep a close eye on China's attempts to boost its economy, Reuters reports.
"Nothing looks particularly attractive at the moment, the volatility in equity markets, the very low level of bond yields," chief global economist at Capital Economics Julian Jessop told Reuters
"Currencies on the other hand may seem to be driven by perceptions of what the Fed might do on rates, while there haven't really been major and obvious big moves in safe havens," Jessop added.
Gold for December delivery is lower by 1.39% to $1,122.50 per ounce on the COMEX this morning.
Separately, TheStreet Ratings team rates NEWMONT MINING CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate NEWMONT MINING CORP (NEM) a HOLD. The primary factors that have impacted our rating are mixed – some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 18.9%. Since the same quarter one year prior, revenues slightly increased by 8.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.57, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that NEM's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.69 is high and demonstrates strong liquidity.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 30.61%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 64.86% compared to the year-earlier 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 company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Metals & Mining industry. The net income has significantly decreased by 60.0% when compared to the same quarter one year ago, falling from $180.00 million to $72.00 million.
- You can view the full analysis from the report here: NEM Ratings Report