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"We rate PRIMERO MINING CORP (PPP) 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. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- PRIMERO MINING CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, PRIMERO MINING CORP reported lower earnings of $0.00 versus $0.51 in the prior year.
- 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 1150.7% when compared to the same quarter one year ago, falling from $10.08 million to -$105.91 million.
- 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, PRIMERO MINING CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- Net operating cash flow has decreased to $12.54 million or 18.21% when compared to the same quarter last year. Despite a decrease in cash flow PRIMERO MINING CORP is still fairing well by exceeding its industry average cash flow growth rate of -55.25%.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 35.29%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 833.33% 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.
- You can view the full analysis from the report here: PPP Ratings Report