Newmont Mining (NEM) Stock Rising Today as Gold Advances

NEW YORK (TheStreet) -- Shares of Newmont Gold Corp. (NEM) are higher by 4.59% to $19.29 in mid-morning trading on Monday, as gold mining stocks get a boost from the rise in gold futures.

Gold futures advanced as the precious metal rebounded from a decline earlier today after Switzerland's voters rejected a proposal that would have required the Swiss National Bank to increase its gold reserves, MarketWatch reports.

Gold began to rise due to "haven demand" following a downgrade by Moody's on Japan's government debt rating, based on concerns over a sales-tax delay. Also contributing to the rise in gold is the pullback in the dollar from recent session highs, MarketWatch added.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Gold was up 1.7% to $1,196.30 per ounce earlier this morning, MarketWatch said.

Separately, TheStreet Ratings team rates NEWMONT MINING CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate NEWMONT MINING CORP (NEM) 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 unimpressive growth in net income, poor profit margins, 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 46.5% when compared to the same quarter one year ago, falling from $398.00 million to $213.00 million.
  • The gross profit margin for NEWMONT MINING CORP is currently lower than what is desirable, coming in at 29.61%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 12.19% trails that of the industry average.
  • Net operating cash flow has decreased to $324.00 million or 26.36% when compared to the same quarter last year. Despite a decrease in cash flow NEWMONT MINING CORP is still fairing well by exceeding its industry average cash flow growth rate of -55.16%.
  • The share price of NEWMONT MINING CORP has not done very well: it is down 21.00% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • NEWMONT MINING CORP's earnings per share declined by 50.0% 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, NEWMONT MINING CORP swung to a loss, reporting -$5.16 versus $3.78 in the prior year. This year, the market expects an improvement in earnings ($0.97 versus -$5.16).
  • You can view the full analysis from the report here: NEM Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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