Editor's Note: 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. 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 largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and poor profit margins.
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- HMY's debt-to-equity ratio is very low at 0.05 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 1.24, which illustrates the ability to avoid short-term cash problems.
- HARMONY GOLD MINING CO LTD has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HARMONY GOLD MINING CO LTD increased its bottom line by earning $0.56 versus $0.24 in the prior year. This year, the market expects an improvement in earnings ($0.95 versus $0.56).
- Net operating cash flow has decreased to $99.74 million or 34.21% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, HARMONY GOLD MINING CO LTD has marginally lower results.
- 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 150.8% when compared to the same quarter one year ago, falling from -$6.06 million to -$15.19 million.
-- Written by a member of TheStreet Ratings Staff