The firm said one of its 10 best trade ideas for next year is to short gold. Credit Suisse set a price target of $950 on gold through the end of 2015 and said the precious metal's recent drop below the $1,180 mark indicated the continuation of a bearish trend.
"Gold remains very expensive relative to historical norms, with carrying costs becoming more penal as U.S. interest rates begin to rise," the firm wrote. Credit Suisse added that a strong U.S. dollar would continue to weigh on gold.
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Gold futures were down 1.58%, or $18.90, to $1,178.20 per troy ounce on Wednesday.
Separately, TheStreet Ratings team rates ANGLOGOLD ASHANTI LTD as a "sell" with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ANGLOGOLD ASHANTI LTD (AU) 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 generally high debt management risk and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio of 1.24 is relatively high when compared with the industry average, suggesting a need for better debt level management.
- The gross profit margin for ANGLOGOLD ASHANTI LTD is currently lower than what is desirable, coming in at 32.93%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.08% significantly trails the industry average.
- This stock's share value has moved by only 42.71% over the past year. 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.
- AU, with its decline in revenue, slightly underperformed the industry average of 2.6%. Since the same quarter one year prior, revenues slightly dropped by 5.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Net operating cash flow has remained constant at $320.00 million with no significant change when compared to the same quarter last year. Even though ANGLOGOLD ASHANTI LTD's cash flow growth was minimal, the firm managed to surpass its industry's average growth rate of -55.48%.
- You can view the full analysis from the report here: AU Ratings Report