NEW YORK (TheStreet) -- Shares of IAMGOLD Corp. (IAG - Get Report) are up 6.35% to $3.27 in midday trading with gold prices nearing a five-month high Tuesday as an uncertain outlook for the euro spurred investors to stock up on haven assets, the Wall Street Journal reports.
Spot gold was up 1.52% to $1,295.10 at 12:33 p.m. in New York, while U.S. gold futures for February delivery were up 1.49% an ounce at $1,295.90.
The European Central Bank is expected to announce a bond-buying program after its governing council meets on Thursday, the Journal noted.
Exclusive Report: Jim Cramer's Best Stocks for 2015
The policy move would be aimed at spurring inflation and restoring the region's ailing economy back to health, the Journal said, adding the euro is likely to weaken further in response after sinking to 11-year lows last week after the Swiss National Bank scrapped its cap on the franc's value.
"The stimulus coming in Europe and the possibility of Greece leaving the euro is turning people to gold as a haven," RBC Capital Markets Global Futures SVP George Gero told the Journal. Gold has benefited from these "jitters" as the precious metal is viewed as a store of value and an alternative to currency investments, the Journal explained.
Separately, the company announced last week that it received regulatory approvals to complete the sale of its Niobec mine to a group of companies led by Magris Resources for cash proceeds of $500 million after tax upon closing.
TheStreet Ratings team rates IAMGOLD CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate IAMGOLD CORP (IAG) a SELL. This is driven by multiple 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 feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- IAMGOLD CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, IAMGOLD CORP swung to a loss, reporting -$2.21 versus $0.89 in the prior year.
- 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 386.6% when compared to the same quarter one year ago, falling from $25.30 million to -$72.50 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, IAMGOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for IAMGOLD CORP is currently lower than what is desirable, coming in at 34.55%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -21.22% is significantly below that of the industry average.
- The share price of IAMGOLD 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.
- You can view the full analysis from the report here: IAG Ratings Report