Why Kinross Gold (KGC) Stock Is Sinking On Monday

NEW YORK (TheStreet) -- Shares of Kinross Gold Corp. (KGC) are down by -2.29% to $4.26 in early afternoon trading on Monday as the gold sector takes a hit as it prepares for its biggest loss of 2014, Bloomberg reports.

August gold futures declined -2.2% to $1,307.50 per ounce on Monday morning.

Portuguese banking concerns have quieted and equities have advanced, reducing investor demands for safe haven assets.

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The turnaround in the gold stocks comes after the industry saw several weeks of gains, due in part to missed payments on notes, by the parent company of Portugal second largest bank, Bloomberg added.

Other gold stocks falling today include Goldcorp Inc. (GG), down -2.53% to $27.70, Yamana Gold Inc. (AUY), lower by -2.20% to $8.23, and Allied Nevada Gold Corp. (ANV), declining by -6.38% to $3.67.

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

"We rate KINROSS GOLD CORP (KGC) 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:

  • KINROSS 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, KINROSS GOLD CORP reported poor results of -$2.64 versus -$2.23 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 81.5% when compared to the same quarter one year ago, falling from $160.50 million to $29.60 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, KINROSS 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 $208.10 million or 41.88% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, KINROSS GOLD CORP has marginally lower results.
  • The share price of KINROSS GOLD CORP has not done very well: it is down 7.58% 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: KGC Ratings Report
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