Gold Fields (GFI) Stock Falls as Gold Prices Once Again Decline

NEW YORK (TheStreet) -- Shares of Gold Fields  (GFI) fell 4.61% to $3.52 in afternoon trading Monday to give up some of the gains it made Friday after gold prices briefly rallied.

Gold for December delivery rose by 2.4%, or $27.20, to reach $1,169.80 per troy ounce on Friday, the Wall Street Journal reported.

The rally in the gold company's shares on Friday stemmed from data that showed jobs growth in October was weaker than expected, along with gold having its largest one-day percentage gain since June 19.

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But gold prices once again declined on Monday to $1,165.70, which sent the gold stocks lower.

Separately, TheStreet Ratings team rates GOLD FIELDS LTD as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate GOLD FIELDS LTD (GFI) a SELL. This is driven by a number of negative factors, 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 generally disappointing historical performance in the stock itself and disappointing return on equity."

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

  • GFI has underperformed the S&P 500 Index, declining 24.05% from its price level of one year ago. 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.
  • 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 on the basis of return on equity, GOLD FIELDS LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Despite currently having a low debt-to-equity ratio of 0.51, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
  • GOLD FIELDS LTD 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, GOLD FIELDS LTD swung to a loss, reporting -$0.78 versus $0.44 in the prior year. This year, the market expects an improvement in earnings ($0.13 versus -$0.78).
  • 35.57% is the gross profit margin for GOLD FIELDS LTD which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, GFI's net profit margin of 2.61% significantly trails the industry average.
  • You can view the full analysis from the report here: GFI Ratings Report

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