Kinross Gold (KGC) Stock Hits One-Year Low as Gold Prices Decline

NEW YORK (TheStreet) -- Shares of Kinross Gold  (KGC) fell more than 10% to a 52-week low of $2.36 on Thursday as gold prices declined to less than $1,200 an ounce for the first time since October 3.

Gold for December delivery sank 2.2% to $1,198.60 an ounce. The decline stemmed partially from the Federal Reserve's announcement that it would end its QE3 bond buying program.

The news that the Fed had nixed the stimulus program indicated its confidence in the recovery of the U.S. economy, which grew 3.5% in the third quarter thanks to an increase in exports and federal spending.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

More than 11.9 million shares had changed hands as of 2:59 p.m., compared to the average volume of 10,644,500.

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 some concerns, 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 45.28%, 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'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 0.7%. 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 ($0.12 versus -$2.64).
  • 40.65% is the gross profit margin for KINROSS GOLD CORP which we consider to be strong. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, KGC's net profit margin of 4.83% significantly trails the industry average.
  • You can view the full analysis from the report here: KGC Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

More from Markets

How to Be a Tactical Investor in the Current Market

How to Be a Tactical Investor in the Current Market

Dow Rebounds From Thursday's Sharp Decline, P&G Jumps

Dow Rebounds From Thursday's Sharp Decline, P&G Jumps

State Street Shares Fall as Earnings Fail to Meet Expectations

State Street Shares Fall as Earnings Fail to Meet Expectations

Message to the Fed From Jim Cramer

Message to the Fed From Jim Cramer

Skechers Flying High as Major Indexes Rebound

Skechers Flying High as Major Indexes Rebound