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 downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.
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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 -39.33%.
- 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% significantly outperformed against the industry.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, RANDGOLD RESOURCES LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- 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 33.3% when compared to the same quarter one year ago, falling from $121.56 million to $81.10 million.