NEW YORK ( TheStreet) -- Northgate Minerals Corporation (AMEX: NXG) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its increase in net income, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year. Highlights from the ratings report include:
- NXG has underperformed the S&P 500 Index, declining 7.70% 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 return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market, NORTHGATE MINERALS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite currently having a low debt-to-equity ratio of 0.31, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.15 is very high and demonstrates very strong liquidity.
- Net operating cash flow has significantly increased by 146.32% to $40.11 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 117.26%.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 300.1% when compared to the same quarter one year prior, rising from $4.94 million to $19.76 million.