NEW YORK (TheStreet) -- Shares of Barrick Gold Corp. (ABX) are falling, down 5.26% to $11.52 in midday trading Monday to give up a portion of the gains the company made on Friday after gold prices rallied.
Gold for December delivery rose by 2.4%, or $27.20, to settle at $1,169.80 per troy ounce on Friday, the Wall Street Journal reported.
The rally in Barrick Gold shares on Friday was attributed to data that showed jobs growth in October was weaker than expected, along with gold having its largest one-day percentage gain since June 19, according to the Journal.
About 6.3 million shares of Barrick Gold were traded as of 12:10 p.m., compared to its average trading volume of about 15.05 million a day.
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 a few notable 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 unimpressive growth in net income, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 27.3% when compared to the same quarter one year ago, falling from $172.00 million to $125.00 million.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 38.17%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 38.88% compared to the year-earlier 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.
- Net operating cash flow has decreased to $852.00 million or 30.78% when compared to the same quarter last year. Despite a decrease in cash flow BARRICK GOLD CORP is still fairing well by exceeding its industry average cash flow growth rate of -41.93%.
- BARRICK GOLD CORP's earnings per share declined by 38.9% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, BARRICK GOLD CORP reported poor results of -$9.63 versus -$0.35 in the prior year. This year, the market expects an improvement in earnings ($0.69 versus -$9.63).
- 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 on the basis of return on equity, BARRICK GOLD CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- You can view the full analysis from the report here: ABX Ratings Report