NEW YORK ( TheStreet) -- Allied Nevada Gold (AMEX: ANV) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its increase in net income, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and premium valuation.

Highlights from the ratings report include:
  • 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 379.6% when compared to the same quarter one year prior, rising from $3.06 million to $14.67 million.
  • The revenue growth significantly trails the industry average of 73.8%. Since the same quarter one year prior, revenues rose by 27.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has increased to $15.45 million or 34.75% when compared to the same quarter last year. Despite an increase in cash flow, ALLIED NEVADA GOLD CORP's cash flow growth rate is still lower than the industry average growth rate of 71.83%.
  • 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. When compared to other companies in the Metals & Mining industry and the overall market, ALLIED NEVADA GOLD CORP's return on equity is below that of both the industry average and the S&P 500.

Allied Nevada Gold Corp., together with its subsidiaries, engages in the evaluation, acquisition, exploration, and advancement of gold exploration and development projects in the state of Nevada. The company has a P/E ratio of 112.6, above the average metals & mining industry P/E ratio of 106.2 and above the S&P 500 P/E ratio of 17.7. Allied Nevada has a market cap of $2.66 billion and is part of the basic materials sector and metals & mining industry. Shares are up 22% year to date as of the close of trading on Monday.

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