NEW YORK (TheStreet) -- Shares of Kinross Gold Corp. (KGC) - Get Report are decreasing by 2.19% to $1.79 in mid-morning trading on Thursday, as anticipation of higher U.S. interest rates dents the demand for gold.
Gold is in the green today, but is expected to hit its third consecutive year of losses on expectations of a strong dollar and higher interest rates next year, Reuters reports.
For February delivery, gold is edging up by 0.14% to $1,061.30 per ounce on the COMEX this morning.
"The key factor for gold remains the strong dollar and that ultimately trumps all other issues including the economy and the geopolitics," Ross Norman, chief executive of bullion broker Sharps Pixley told Reuters.
The precious metal is strongly influenced by the greenback because it is more expensive to foreign investors when the dollar is strong.
The price of gold has declined about 10% this year.
Kinross Gold is a gold mining company based in Toronto.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate KINROSS GOLD CORP as a Sell with a ratings score of D. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 933.3% when compared to the same quarter one year ago, falling from -$5.10 million to -$52.70 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, KINROSS GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $232.10 million or 23.39% when compared to the same quarter last year. Despite a decrease in cash flow of 23.39%, KINROSS GOLD CORP is in line with the industry average cash flow growth rate of -28.90%.
- This stock's share value has moved by only 27.03% over the past year. 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.
- Despite the weak revenue results, KGC has significantly outperformed against the industry average of 45.7%. Since the same quarter one year prior, revenues fell by 14.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: KGC