NEW YORK (TheStreet) -- Shares of Newmont Mining (NEM) - Get Newmont Goldcorp Corporation (NEM) Report are down by 2.13% to $16.53 in mid-day trading on Tuesday, as some mining and related stocks take a hit as the price of gold falls amid the global market rebound and strong economic data in the U.S.
Gold for December delivery is falling by 1.20% to $1,139.80 per ounce on the COMEX this afternoon.
The price of the precious metal is being driven into the red as stock prices rebound from yesterday's dramatic selloff on concerns regarding the Chinese economy.
Gold typically becomes more desirable in times of political and economic uncertainty.
Global markets and U.S. stocks moved higher on Tuesday after China's central bank cut interest rates in an attempt to boost the country's struggling economy.
Additionally, consumer views on the U.S. economy improved in August, The Wall Street Journal reports. This shows an improvement in sentiment regarding the labor market.
A separate report showed that the sales of newly built homes in the U.S. rose in July, while analysts were expecting a large decline, The Journal said.
Newmont mining is a British Columbia-based gold producer.
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