Why Barrick Gold (ABX) Stock Is Down Today

NEW YORK (TheStreet) -- Shares of Barrick Gold  (ABX) were down 2.45% to $16.74 in afternoon trading Monday as gold prices hit a three-month low.

Gold for December delivery, the most actively traded contract, fell to $1,257 per troy ounce, the lowest price since June 10, on the Comex division of the New York Mercantile Exchange on Monday morning.

The strengthening of the U.S. dollar has put some pressure on gold prices. Investors, who expect interest rates to rise in 2015, have turned toward the dollar and away from gold as the economy continues to recover, according to the Wall Street Journal.

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Separately, 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 multiple 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 weak operating cash flow and generally disappointing historical performance in the stock itself."

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

  • Net operating cash flow has decreased to $488.00 million or 46.19% 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.
  • ABX has underperformed the S&P 500 Index, declining 12.32% 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 96.8% when compared to the same quarter one year prior, rising from -$8,555.00 million to -$269.00 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength 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.
  • ABX, with its decline in revenue, underperformed when compared the industry average of 0.6%. Since the same quarter one year prior, revenues fell by 24.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: ABX Ratings Report

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