NEW YORK ( TheStreet) -- Great Basin Gold (AMEX: GBG) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, generally weak debt management and generally disappointing historical performance in the stock itself.

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 Metals & Mining industry. The net income has significantly decreased by 43.3% when compared to the same quarter one year ago, falling from -$23.72 million to -$33.99 million.
  • 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, GREAT BASIN GOLD LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for GREAT BASIN GOLD LTD is currently lower than what is desirable, coming in at 34.50%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, GBG's net profit margin of -72.80% significantly underperformed when compared to the industry average.
  • Despite currently having a low debt-to-equity ratio of 0.52, 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 0.15 is very low and demonstrates very weak liquidity.
  • GBG'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 62.04%, which is also worse than the performance of the S&P 500 Index. 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.

Great Basin Gold Ltd. engages in the acquisition, exploration, and development of precious metal deposits. It explores for gold, silver, and aggregate. Great Basin has a market cap of $513.7 million and is part of the basic materials sector and metals & mining industry. Shares are down 65.9% year to date as of the close of trading on Monday.

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