Goldcorp (GG) Stock Falls Today as Gold Prices Decline

NEW YORK (TheStreet) -- Shares of Goldcorp  (GG) fell 4.76% to $17.41 in afternoon trading Monday as gold prices declined.

Gold prices, which hit a four-year low of $1,130.40 in November, stayed below $1,200 an ounce on Monday, as the precious metal price fell 1.85% to $1,173.90 at 2:35 p.m.

A strong dollar has kept gold prices down for the last several weeks. The precious metal was down approximately 15% on Monday from its 2014 high of $1,392.60, which it hit on March 17.

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"The overall environment is very negative for gold," Phil Streible, a senior commodity broker at R.J. O'Brien & Associates in Chicago, told Bloomberg. "The market will remain volatile as trading will be very thin for the next two weeks."

More than 7.6 million shares had changed hands as of 2:35 p.m.

Separately, TheStreet Ratings team rates GOLDCORP INC as a "sell" with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate GOLDCORP INC (GG) a SELL. This is driven by several weaknesses, 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, weak operating cash flow 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 980.0% when compared to the same quarter one year ago, falling from $5.00 million to -$44.00 million.
  • Net operating cash flow has decreased to $192.00 million or 29.92% when compared to the same quarter last year. Despite a decrease in cash flow of 29.92%, GOLDCORP INC is in line with the industry average cash flow growth rate of -30.49%.
  • GOLDCORP INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. 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, GOLDCORP INC swung to a loss, reporting -$3.30 versus $1.78 in the prior year. This year, the market expects an improvement in earnings ($0.75 versus -$3.30).
  • This stock's share value has moved by only 10.98% over the past year. 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.
  • 36.09% is the gross profit margin for GOLDCORP INC which we consider to be strong. Regardless of GG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GG's net profit margin of -5.12% significantly underperformed when compared to the industry average.
  • You can view the full analysis from the report here: GG Ratings Report

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