Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Randgold Resources (Nasdaq: GOLD) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- GOLD's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GOLD has a quick ratio of 2.16, which demonstrates the ability of the company to cover short-term liquidity needs.
- 39.71% is the gross profit margin for RANDGOLD RESOURCES LTD which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, GOLD's net profit margin of 20.22% compares favorably to the industry average.
- The revenue fell significantly faster than the industry average of 5.7%. Since the same quarter one year prior, revenues fell by 26.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- RANDGOLD RESOURCES 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, RANDGOLD RESOURCES LTD increased its bottom line by earning $4.64 versus $4.07 in the prior year. For the next year, the market is expecting a contraction of 39.6% in earnings ($2.80 versus $4.64).
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.34%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 60.31% compared to the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.