NEW YORK ( TheStreet) -- Denison Mines Corporation (AMEX: DNN) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins and weak operating cash flow. Highlights from the ratings report include:
- 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 182.5% when compared to the same quarter one year ago, falling from $16.67 million to -$13.75 million.
- The gross profit margin for DENISON MINES CORP is currently extremely low, coming in at 12.10%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -80.90% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$16.59 million or 218.18% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, DENISON MINES CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- After a year of stock price fluctuations, the net result is that DNN's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. This company's share value has not moved any higher or lower since its value 12 months ago, and we feel the risks associated with investing in this company will outweigh any potential future gains.