NEW YORK (TheStreet) -- Shares of gold and silver producer McEwen Mining (MUX) closed down 10.98% to $1.46 on Wednesday after Credit Suisse (CS) issued a bearish report on gold through the end of 2015.
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.
Gold futures fell 1.58%, or $18.90, to $1,178.20 per troy ounce on Wednesday. Silver futures declined 0.33% to $16.12 per ounce.
More than 4.7 million shares changed hands Wednesday, compared to the daily average volume of 2,382,330.
Separately, TheStreet Ratings team rates MCEWEN MINING INC as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate MCEWEN MINING INC (MUX) 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. 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:
- MUX'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 35.54%, 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.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, MCEWEN MINING INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- MCEWEN MINING INC has improved earnings per share by 18.6% 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, MCEWEN MINING INC reported poor results of -$0.50 versus -$0.26 in the prior year. This year, the market expects an improvement in earnings ($0.00 versus -$0.50).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Metals & Mining industry average. The net income increased by 19.2% when compared to the same quarter one year prior, going from -$128.68 million to -$104.02 million.
- Net operating cash flow has significantly increased by 68.48% to -$3.21 million when compared to the same quarter last year. In addition, MCEWEN MINING INC has also vastly surpassed the industry average cash flow growth rate of -55.48%.
- You can view the full analysis from the report here: MUX Ratings Report