Why Kinross Gold (KGC) Stock Is Down Today

NEW YORK (TheStreet) -- Shares of Kinross Gold Corp. (KGC)   closed down 2.08% to $3.30 on heavy volume in late afternoon trading on Tuesday, as gold mining stocks fell following a price drop in gold futures for December delivery by 0.6% to $1,211.60 an ounce, Bloomberg reports.

Gold futures declined to their lowest price since January as higher U.S. interest rates and an improvement in the dollar caused the demand for precious metals to drop.

Other gold mining stocks slumping Tuesday include Barrick Gold Corp. (ABX) , lower by 1.93% to $14.71, NovaGold Resources Inc. (NG) , down by 2.57% to $3.03, and Goldcorp Inc. (GG) , lower by 1.24% to $23.08.

Separately, 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 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. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself."

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

  • KGC's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 32.36%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • 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 101.4% when compared to the same quarter one year prior, rising from -$3,203.00 million to $44.10 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, KINROSS GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • KGC, with its decline in revenue, slightly underperformed the industry average of 0.6%. Since the same quarter one year prior, revenues slightly dropped by 5.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • KINROSS GOLD CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, KINROSS GOLD CORP reported poor results of -$2.64 versus -$2.23 in the prior year. This year, the market expects an improvement in earnings ($0.16 versus -$2.64).
  • You can view the full analysis from the report here: KGC Ratings Report

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