Why Newmont Mining (NEM) Stock Is Lower This Morning

NEW YORK (TheStreet) -- Shares of Newmont Mining Corp.   (NEM) are down -5.85% to $24.90 in pre-market trade.

Barrick Gold Corp. (ABX) said Newmont Mining ended talks about a takeover, which would have combined the world's two largest gold producers, Bloomberg reports.

Barrick said in a statement this morning that it was informed by Newmont of the termination of the discussions.

Must Read: Warren Buffett's 10 Favorite Growth Stocks

TheStreet Ratings team rates NEWMONT MINING CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate NEWMONT MINING CORP (NEM) a SELL. This is driven by some concerns, 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 deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

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

  • 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 68.3% when compared to the same quarter one year ago, falling from $315.00 million to $100.00 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, NEWMONT MINING CORP'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 $180.00 million or 58.42% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, NEWMONT MINING CORP has marginally lower results.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 25.76%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 63.49% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • NEWMONT MINING 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, NEWMONT MINING CORP swung to a loss, reporting -$5.06 versus $3.78 in the prior year. This year, the market expects an improvement in earnings ($0.76 versus -$5.06).You can view the full analysis from the report here: NEM Ratings Report
STOCKS TO BUY: TheStreet's Stocks Under $10 has identified a handful of stocks that can potentially TRIPLE in the next 12-months.Learn more.

More from Markets

Apple and GE Switch Roles; Musk's Super Control of Tesla Explained -- ICYMI

Apple and GE Switch Roles; Musk's Super Control of Tesla Explained -- ICYMI

Trump May Be More to Blame For Higher Oil Prices Than OPEC

Trump May Be More to Blame For Higher Oil Prices Than OPEC

Dow Falls Over 200 Points as Apple's Slump Offsets Gains in General Electric

Dow Falls Over 200 Points as Apple's Slump Offsets Gains in General Electric

Week Ahead: Major Earnings on Tap as Wall Street Readies for Geopolitical Moves

Week Ahead: Major Earnings on Tap as Wall Street Readies for Geopolitical Moves

3 Hot Reads From TheStreet's Top Premium Columnists

3 Hot Reads From TheStreet's Top Premium Columnists