NEW YORK (TheStreet) -- Barrick Gold Corp. (ABX) closed up 2.48% at $18.18 during Friday trading, up 45 cents from its previous close of $11.84. The stock had a volume of 15,307,162 compared to its average volume of 17,423,600.
Barrick and Newmont suffered through a difficult 2013 as gold prices decreased $1,200 to $1,700 an ounce. Despite today's gains, the upcoming year could prove just as, if not more, difficult, as Moody's reduced its expectations for the average price of gold to $1,100 an ounce.
TheStreet Ratings team rates BARRICK GOLD CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about its recommendation:
"This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally high debt management risk, disappointing return on equity and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BARRICK GOLD CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, BARRICK GOLD CORP swung to a loss, reporting -$0.56 versus $4.48 in the prior year.
- 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 73.5% when compared to the same quarter one year ago, falling from $649.00 million to $172.00 million.
- The debt-to-equity ratio of 1.13 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, ABX maintains a poor quick ratio of 0.81, which illustrates the inability to avoid short-term cash problems.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, BARRICK GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $1,231.00 million or 28.92% 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.
- You can view the full analysis from the report here: ABX Ratings Report