NEW YORK (TheStreet) -- Shares of Yamana Gold Inc. (AUY) are up by 2.05% to $8.69 in late afternoon trading on Wednesday as gold stocks reacts positively to a 1.8% rise in the price of gold to $1,308.20 an ounce.
Gold for December delivery increased by $22.90 settling over $1,300 for the first time since July 29, Market Watch reports.
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Separately, TheStreet Ratings team rates YAMANA GOLD INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate YAMANA GOLD INC (AUY) 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:
- YAMANA GOLD INC 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, YAMANA GOLD INC swung to a loss, reporting -$0.59 versus $0.59 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 129.0% when compared to the same quarter one year ago, falling from $102.10 million to -$29.61 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, YAMANA GOLD INC'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 $38.98 million or 77.57% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of YAMANA GOLD INC has not done very well: it is down 18.86% 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- You can view the full analysis from the report here: AUY Ratings Report