Will Yamana Gold (AUY) Stock Be Affected by Retreating Gold Prices? - TheStreet

NEW YORK (TheStreet) -- Yamana Gold (AUY) - Get Report  shares closed Wednesday's trading session up 0.48% to $2.08 despite declining gold prices. 

Gold for December delivery is sliding by 0.29% to $1070.70 per ounce on the COMEX this afternoon.

The strong dollar following robust U.S. economic data weighed down on gold futures, as gold is more pricey for foreign currency holders. 

Manufacturing output came in ahead of analysts' projections in October, according to Reuters. 

Based in Toronto, Yamana Gold engages in gold mining and related activities, including exploration, extraction, processing, and reclamation.

Separately, TheStreet Ratings team rates YAMANA GOLD INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate YAMANA GOLD INC (AUY) a SELL. This is driven by several 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 generally disappointing historical performance in the stock itself and weak operating cash flow.

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

  • AUY'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 51.77%, 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.
  • Net operating cash flow has significantly decreased to $77.90 million or 50.96% when compared to the same quarter last year. Despite a decrease in cash flow of 50.96%, YAMANA GOLD INC is in line with the industry average cash flow growth rate of -54.42%.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, YAMANA GOLD INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • YAMANA GOLD INC reported significant earnings per share improvement 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, YAMANA GOLD INC reported poor results of -$1.36 versus -$0.59 in the prior year.
  • Despite the weak revenue results, AUY has significantly outperformed against the industry average of 45.4%. Since the same quarter one year prior, revenues slightly dropped by 9.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: AUY