NEW YORK (TheStreet) -- Goldcorp (GG), the world's second-largest gold miner by market value, dipped Thursday after the company increased its buyout offer for fellow Canadian company Osisko Mining Corp. to surpass Yamana Gold's (AUY) bid.
Goldcorp increased its hostile offer to C$3.6 billion, or $3.3 billion, as it tries to take control of Osisko's Canadian Malartic gold mine in Quebec. This new offer equates to C$7.65 a share, up from a previous offer of C$5.95 a share. Earlier in April, Osisko revealed Yamana's bid for 50% of its assets, which valued Osisko at approximately C$3.3 billion, or C$7.60 per share.
Osisko CEO Sean Roosen told Reuters on Tuesday that it would be difficult for Goldcorp to beat Yamana's offer.
Goldcorp was down 3.01% to $24.81 at 11:25 a.m.
Separately, TheStreet Ratings team rates GOLDCORP INC as a "sell" with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate GOLDCORP INC (GG) a SELL. This is driven by several 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, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GOLDCORP INC 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, GOLDCORP INC swung to a loss, reporting -$3.29 versus $1.78 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 316.1% when compared to the same quarter one year ago, falling from $504.00 million to -$1,089.00 million.
- 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, GOLDCORP INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to $307.00 million or 60.99% 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.
- The share price of GOLDCORP INC has not done very well: it is down 21.21% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- You can view the full analysis from the report here: GG Ratings Report