NEW YORK (TheStreet) -- Shares of Goldcorp (GG) are higher by 1.46% to $11.81 in midday trading on Tuesday afternoon, as some metal and mining stocks are driven into the green by the rise in gold prices.
The price of the precious metal is getting a boost from demand for safe havens amid geopolitical tensions in the Middle East, spurred by Turkey downing a Russian fighter jet along the Syrian border today.
"This is a clear escalation of the crisis, which should lift gold," Carsten Fritsch, an analyst at Commerzbank told Reuters.
Gold for December delivery is up by 0.68% to $1,073.80 per ounce on the COMEX this afternoon.
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.
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 number of negative factors, 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 generally disappointing historical performance in the stock itself.
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 336.4% when compared to the same quarter one year ago, falling from -$44.00 million to -$192.00 million.
- 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.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 39.48%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 283.33% 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.
- GOLDCORP INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GOLDCORP INC continued to lose money by earning -$2.67 versus -$3.30 in the prior year. This year, the market expects an improvement in earnings ($0.13 versus -$2.67).
- GG's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that GG's debt-to-equity ratio is low, the quick ratio, which is currently 0.68, displays a potential problem in covering short-term cash needs.
- You can view the full analysis from the report here: GG
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.