NEW YORK (TheStreet) -- Newmont Mining (NEM) - Get Report stock is sliding by 1.61% to $16.51 in mid-morning trading on Friday, as gold and copper prices decline on a stronger dollar and an increased likelihood that the Fed will raise interest rates this year.
On Thursday, Federal Reserve Chairwoman Janet Yellen spoke at the University of Massachusetts about inflation and Fed policy, and indicated that the central bank will likely increase interest rates by the end of 2015.
The dollar has strengthened on the prospect of higher rates, which is weighing on prices of commodities such as gold and copper that are priced in the greenback and therefore relatively more expensive to foreign buyers.
Also dragging down copper prices today is renewed concern about demand from China, the world's top metals consumer, after the country released data for September that showed the biggest decline in Chinese factory activity since the financial crisis, Reuters reports.
Gold for December delivery is lower by 0.84% to $1,144.10 per ounce, and copper for September delivery is decreasing by 0.99% to $2.29 per pound this morning on the COMEX.
Newmont Mining, based in Greenwood Village, Colo., is also engaged in the exploration for and acquisition of gold and copper properties.
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 expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 45.0%. 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.
- 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 significantly decreased by 60.0% when compared to the same quarter one year ago, falling from $180.00 million to $72.00 million.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 30.12%, 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.
- You can view the full analysis from the report here: NEM