U.S. silver futures for March 2015 delivery were gaining 3.2% to $16.29 on the Comex late Tuesday morning.
Prices of the metal were rising due to a weaker U.S. dollar, and concerns of tension between Russia and Western countries, according to Reuters. The strengthening of the yen, falling oil prices, and concerns about the upcoming election in Greece may also be contributing to the rise in precious metal prices, according to Reuters.
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TheStreet Ratings team rates PAN AMERICAN SILVER CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PAN AMERICAN SILVER CORP (PAAS) 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 deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself."
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 243.1% when compared to the same quarter one year ago, falling from $14.15 million to -$20.25 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, PAN AMERICAN SILVER CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for PAN AMERICAN SILVER CORP is currently extremely low, coming in at 12.16%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -11.36% is significantly below that of the industry average.
- Net operating cash flow has declined marginally to $38.50 million or 5.46% when compared to the same quarter last year. Despite a decrease in cash flow PAN AMERICAN SILVER CORP is still fairing well by exceeding its industry average cash flow growth rate of -31.21%.
- The share price of PAN AMERICAN SILVER CORP has not done very well: it is down 21.99% 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.
- You can view the full analysis from the report here: PAAS Ratings Report