Yamana Gold (AUY) Gains Despite Not Meeting Output Target

NEW YORK (TheStreet) -- Yamana Gold (AUY) was gaining 6% to $9.72 Monday despite announcing that it missed its 2013 output target.

The gold mining company announced it produced about 1.2 million gold equivalent ounces in 2013. In July, Yamana said it expected to produce between 1.32 million and 1.37 million gold equivalent ounces by the end of the year.

Yamana now expects to produce 1.4 million gold equivalent ounces in 2014, which is at the low end of its previous forecast. The company previously said it expects to produce between 1.4 million and 1.5 million gold equivalent ounces in 2014.

The gold mining company will announce its fourth-quarter results on Feb. 18 after the the close of the market.

Must read: Stocks Under $10 Weekly Summary

TheStreet Ratings team rates YAMANA GOLD INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate YAMANA GOLD INC (AUY) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • AUY's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that AUY's debt-to-equity ratio is low, the quick ratio, which is currently 0.56, displays a potential problem in covering short-term cash needs.
  • The gross profit margin for YAMANA GOLD INC is rather high; currently it is at 53.24%. Regardless of AUY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.51% trails the industry average.
  • AUY, with its decline in revenue, underperformed when compared the industry average of 1.9%. Since the same quarter one year prior, revenues fell by 25.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 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 27.5% when compared to the same quarter one year ago, falling from $59.96 million to $43.45 million.
  • Net operating cash flow has significantly decreased to $99.08 million or 72.71% 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: AUY Ratings Report

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