Aurizon Mines Ltd. Stock Downgraded (AZK)

NEW YORK ( TheStreet) -- Aurizon Mines (AMEX: AZK) 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 notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.2%. Since the same quarter one year prior, revenues rose by 20.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • AZK has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 6.07, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for AURIZON MINES LTD is rather high; currently it is at 59.40%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.60% trails the industry average.
  • Net operating cash flow has significantly decreased to $3.42 million or 76.44% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • AZK has underperformed the S&P 500 Index, declining 10.42% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

Aurizon Mines Ltd. engages in the acquisition, exploration, development, and production of gold properties in North America. The company's principal properties include the Casa Berardi gold mine and the Joanna gold project both located in the Abitibi region of northwestern Quebec. The company has a P/E ratio of 15.6, equal to the average metals & mining industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Aurizon Mines has a market cap of $768.8 million and is part of the basic materials sector and metals & mining industry. Shares are up 7.3% year to date as of the close of trading on Monday.

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

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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