Barrick Gold Corporation Stock Buy Recommendation Reiterated (ABX)

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) -- Barrick Gold Corporation (NYSE: ABX) has been reiterated by TheStreet Ratings as a buy with a ratings score of B- . The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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Highlights from the ratings report include:
  • The gross profit margin for BARRICK GOLD CORP is rather high; currently it is at 50.50%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, ABX's net profit margin of 18.00% compares favorably to the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 20.0%. Since the same quarter one year prior, revenues fell by 14.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.55, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.73 is weak.
  • BARRICK GOLD CORP 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 not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, BARRICK GOLD CORP increased its bottom line by earning $4.48 versus $3.17 in the prior year.

Barrick Gold Corporation engages in the production and sale of gold and copper. The company has a portfolio of 26 operating mines, and exploration and development projects located in North America, South America, the Australia Pacific region, and Africa. Barrick has a market cap of $35.4 billion and is part of the basic materials sector and metals & mining industry. The company has a P/E ratio of 10.5, below the S&P 500 P/E ratio of 17.7. Shares are down 21.8% year to date as of the close of trading on Monday.

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

--Written by a member of TheStreet Ratings Staff.

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