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 good cash flow from operations, 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 lackluster performance in the stock itself.
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- Net operating cash flow has significantly increased by 57.56% to $209.79 million when compared to the same quarter last year. In addition, RANDGOLD RESOURCES LTD has also vastly surpassed the industry average cash flow growth rate of -35.16%.
- 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. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.95 is somewhat weak and could be cause for future problems.
- 47.75% is the gross profit margin for RANDGOLD RESOURCES LTD which we consider to be strong. Regardless of GOLD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GOLD's net profit margin of 27.79% compares favorably to the industry average.
- RANDGOLD RESOURCES LTD's earnings per share declined by 33.6% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, RANDGOLD RESOURCES LTD reported lower earnings of $2.99 versus $4.65 in the prior year. This year, the market expects an improvement in earnings ($3.90 versus $2.99).
- GOLD, with its decline in revenue, underperformed when compared the industry average of 8.7%. Since the same quarter one year prior, revenues fell by 16.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.