Harmony Gold Mining Co. Ltd. Stock Downgraded (HMY)

NEW YORK ( TheStreet) -- Harmony Gold Mining (NYSE: HMY) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. 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:
  • The revenue growth came in higher than the industry average of 2.0%. Since the same quarter one year prior, revenues rose by 27.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • HMY's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.25, which illustrates the ability to avoid short-term cash problems.
  • 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. When compared to other companies in the Metals & Mining industry and the overall market, HARMONY GOLD MINING CO LTD's return on equity is below that of both the industry average and the S&P 500.
  • HMY'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 31.69%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, HMY is still more expensive than most of the other companies in its industry.
.

Harmony Gold Mining Company Limited engages in the exploration, processing, and smelting of gold in South Africa and Papua New Guinea. The company has a P/E ratio of 49.7, above the average metals & mining industry P/E ratio of 47.2 and above the S&P 500 P/E ratio of 17.7. Harmony has a market cap of $4.07 billion and is part of the basic materials sector and metals & mining industry. Shares are down 18.9% year to date as of the close of trading on Tuesday.

You can view the full Harmony Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet Ratings Staff
null

If you liked this article you might like

Harmony Gold (HMY) Stock Slumps on Lower Gold Prices

Will Harmony Gold (HMY) Stock Be Hurt by Retreating Gold Prices?

Harmony Gold (HMY) Stock Down, Will Stop Production in Third-Largest Mine

Harmony Gold (HMY) Stock Higher on Gold Price Increase

Harmony Gold (HMY) Stock Closed Up on Higher Gold Prices