NEW YORK ( TheStreet) -- Golden Star Resources (AMEX: GSS) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • Net operating cash flow has decreased to $20.34 million or 46.38% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for GOLDEN STAR RESOURCES LTD is rather low; currently it is at 15.50%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -17.00% is significantly below that of the industry average.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Metals & Mining industry and the overall market, GOLDEN STAR RESOURCES LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • 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 191.6% when compared to the same quarter one year ago, falling from $19.63 million to -$17.97 million.
  • GOLDEN STAR RESOURCES LTD has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, GOLDEN STAR RESOURCES LTD swung to a loss, reporting -$0.03 versus $0.06 in the prior year.

Golden Star Resources Ltd., a gold mining and exploration company, through its subsidiaries, engages in the exploration and production of gold. The company has a P/E ratio of 62.3, above the S&P 500 P/E ratio of 21.5. Golden Star has a market cap of $801.5 million and is part of the basic materials sector and metals & mining industry. Shares are up 43.6% year to date as of the close of trading on Wednesday.

You can view the full Golden Star Ratings Report or get investment ideas from our investment research center.
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