NEW YORK (TheStreet) -- Yamana Gold (AUY) - Get Report shares are jumping 3.76% to $1.93 on Monday with gold futures. Investors sought haven in gold as Middle East tensions and a drop in China's stock market concern investors.
Gold for February delivery is rallying 1.74% to $1,078.60 per ounce on the COMEX.
Trading on China's stock markets was suspended following the stock market drop by 5%. This was largely due to China's weak manufacturing survey adding to the growing concerns about the country's economic health, CNBC.com stated.
Additionally, tensions were intensifying between Saudi Arabia and Iran following Saudi Arabia's execution of a dissident Shitte cleric, MarketWatch said. This sent investors to seek haven in assets like gold.
Based in Canada, Yamana Gold engages in gold mining and related activities, including exploration, extraction, processing, and reclamation. The company has precious metal properties and land positions in the Americas.
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 YAMANA GOLD INC 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 weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly decreased to $77.90 million or 50.96% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- 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 54.06%, 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.
- 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 45.9%. 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