Buenaventura Mining Co Inc Stock Downgraded (BVN)

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) -- Buenaventura Mining (NYSE: BVN) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

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Highlights from the ratings report include:
  • 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 on the basis of return on equity, MINAS BUENAVENTURA SA underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for MINAS BUENAVENTURA SA is currently lower than what is desirable, coming in at 32.32%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 7.56% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to $41.76 million or 50.75% 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.
  • BVN has underperformed the S&P 500 Index, declining 18.12% from its price level of one year ago. 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.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Metals & Mining industry average, but is greater than that of the S&P 500. The net income increased by 21.8% when compared to the same quarter one year prior, going from $18.95 million to $23.09 million.

Compania de Minas Buenaventura S.A.A., a precious metals company, is engaged in the exploration, mining, and processing of gold and silver. It also explores for other metals, including lead, zinc, and copper. Buenaventura has a market cap of $2.97 billion and is part of the basic materials sector and metals & mining industry. Shares are up 7.5% year to date as of the close of trading on Monday.

You can view the full Buenaventura Ratings Report or get investment ideas from our investment research center.

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