Goldcorp is a Vancouver-based gold producer that is engaged in the acquisition, exploration, development and operation of gold properties in North America, Mexico and Central and South America.
Gold is tumbling today as the Federal Reserve could hike up interest rates at its meeting in December. Higher interest rates can weigh on gold as the asset pays no interest to those that hold it.
Gold for December delivery is retreating by 2.28% to $1,149.20 per ounce on the COMEX this morning.
"The Fed hint that it may hike in December has been to the detriment of all commodity prices, as the dollar index surged ahead in the wake of the statement. For now, the market seems fairly confident that December is literally D-Day; but then the market was pretty confident back in September too," head analyst at London Capital Group Brenda Kelly told MarketWatch.
Separately, TheStreet Ratings team rates GOLDCORP INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
We rate GOLDCORP INC (GG) a SELL. This is driven by a few notable weaknesses, 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 disappointing return on equity and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market, GOLDCORP INC's return on equity significantly trails that of both the industry average and the S&P 500.
- GG's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 31.90%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
- GOLDCORP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, GOLDCORP INC continued to lose money by earning -$2.68 versus -$3.30 in the prior year. This year, the market expects an improvement in earnings ($0.21 versus -$2.68).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 116.6% when compared to the same quarter one year prior, rising from $181.00 million to $392.00 million.
- 46.13% is the gross profit margin for GOLDCORP INC which we consider to be strong. It has increased from the same quarter the previous year.
- You can view the full analysis from the report here: GG