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"We rate SOUTHERN COPPER CORP (SCCO) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, feeble growth in the company's earnings per share and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SCCO's revenue growth has slightly outpaced the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 6.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- SCCO's debt-to-equity ratio of 0.72 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that SCCO's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.53 is high and demonstrates strong liquidity.
- SOUTHERN COPPER CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, SOUTHERN COPPER CORP reported lower earnings of $1.92 versus $2.28 in the prior year. For the next year, the market is expecting a contraction of 16.7% in earnings ($1.60 versus $1.92).
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Metals & Mining industry average. The net income has decreased by 5.8% when compared to the same quarter one year ago, dropping from $344.22 million to $324.32 million.
- You can view the full analysis from the report here: SCCO Ratings Report