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NEW YORK (TheStreet) -- Shares of Richmont Mines (RIC) are up 3.62% to $1.34 after it reported a 107% year on year increase in second quarter gold production to 29,091 ounces.

Richmont is also revising its 2014 production guidance upward to 75,000 to 85,000 ounces of gold from its previous guidance of 70,000 to 80,000 ounces.

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TheStreet Ratings team rates RICHMONT MINES INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

TheStreet Recommends

"We rate RICHMONT MINES INC (RIC) 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 disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself."

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

  • 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, RICHMONT MINES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for RICHMONT MINES INC is rather low; currently it is at 18.99%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -6.45% is significantly below that of the industry average.
  • RIC has underperformed the S&P 500 Index, declining 8.58% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Metals & Mining industry average, but is greater than that of the S&P 500. The net income increased by 15.0% when compared to the same quarter one year prior, going from -$2.24 million to -$1.90 million.
  • RICHMONT MINES INC has improved earnings per share by 16.7% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, RICHMONT MINES INC reported poor results of -$0.84 versus -$0.09 in the prior year.
  • You can view the full analysis from the report here: RIC Ratings Report

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