Will Barrick Gold (ABX) Stock Be Helped By Saudi Mining Deal?

NEW YORK (TheStreet) -- Barrick Gold (ABX) will work with the Saudi Arabian Mining Company (Ma'aden) to develop its copper mine in the country, a partnership that the Canadian company aims to replicate with other projects such as its mothballed Pascua Lama in the Andes, the Globe and Mail reports.

Ma'aden will pay U.S.$210 million to own half of Barrick's Jabal Sayid copper asset, which has been delayed due to regulatory hurdles in the Kingdom.

Shares of Barrick Gold are down -1.09% to $19.08.

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

"We rate BARRICK GOLD CORP (ABX) a SELL. This is driven by a number of negative factors, 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 and weak operating cash flow."

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

  • BARRICK GOLD 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. During the past fiscal year, BARRICK GOLD CORP reported poor results of -$9.63 versus -$0.35 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 89.6% when compared to the same quarter one year ago, falling from $847.00 million to $88.00 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, BARRICK GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $585.00 million or 46.08% 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.
  • 48.63% is the gross profit margin for BARRICK GOLD CORP which we consider to be strong. Regardless of ABX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ABX's net profit margin of 3.34% is significantly lower than the industry average.
  • You can view the full analysis from the report here: ABX Ratings Report

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