Skip to main content

NEW YORK (TheStreet) -- Shares of Newmont Mining (NEM) - Get Newmont Corporation Report were gaining 3.9% to $18.63 in early afternoon trading on Thursday, as gold prices increased for the second day in a row.

Gold for December delivery was up 1.99% to $1,150.30 an ounce on the Comex this afternoon.

Prices of the precious metal were rising as a result of dovish Federal Reserve minutes and declines in the U.S. stock market, according to Market Watch. Minutes from the Federal Open Market Committee's July meeting shows that some officials believe inflation is still too low to justify an interest rate increase, according to the news service.

The dovish comments helped weaken the dollar, which helped bring up gold prices by making the yellow metal cheaper to those holding other currencies.

"Short-term, we think gold could rally to $1,190 before hitting much resistance," Altavest Worldwide Trading Principal and Co-founder Mike Armbruster told Market Watch. "If gold can move decisively through $1,200, then gold starts to look much more interesting."

TheStreet Recommends

Newmont Mining is a Greenwood Village, CO-based gold producer with active mines in Nevada, Indonesia, Australia, New Zealand, Ghana, and Peru. BMO Capital Markets initiated coverage of Newmont Mining last week with an "outperform" rating.

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, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and unimpressive growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 15.3%. 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.
  • Net operating cash flow has increased to $438.00 million or 16.80% when compared to the same quarter last year. In addition, NEWMONT MINING CORP has also vastly surpassed the industry average cash flow growth rate of -43.14%.
  • 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 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.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 35.39%, 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. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • You can view the full analysis from the report here: NEM Ratings Report