Barrick Gold (ABX) Stock Lower Today as Gold Prices Decline

NEW YORK (TheStreet) -- Shares of Barrick Gold Corp. (ABX) are down 1.12% to $12.74 in afternoon trading today as gold prices decline.

Gold for April delivery was down 0.32% to $1,201 at 1:36 p.m. on the COMEX in New York.

Gold hovered around the key $1,200-an-ounce level on Monday, its lowest in seven weeks, as support for the safe-haven metal eased after a deal was struck over Greece's debt, and while the absence of major gold consumer China due to the Lunar New Year holiday also took a toll, Reuters reports.

Separately, the Toronto-based miner, the biggest producer of the precious metal by sales, is working with Credit Suisse on the possible sale of gold mines in Australia and Papua New Guinea, sources told Bloomberg.

The company plans to send preliminary information on the Cowal and Porgera mines to potential buyers by the end of the month, the source said.

Barrick could raise as much as $1.1 billion from selling the assets, TD Securities said earlier this month, according to Bloomberg.

TheStreet Ratings team rates BARRICK GOLD CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate BARRICK GOLD CORP (ABX) 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 weak operating cash flow, generally disappointing historical performance in the stock itself, unimpressive growth in net income and generally high debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has significantly decreased to $371.00 million or 63.48% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, BARRICK GOLD CORP has marginally lower results.
  • The debt-to-equity ratio of 1.28 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, ABX's quick ratio is somewhat strong at 1.22, demonstrating the ability to handle short-term liquidity needs.
  • ABX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 35.16%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The change in net income from the same quarter one year ago has exceeded that of the Metals & Mining industry average, but is less than that of the S&P 500. The net income has decreased by 0.7% when compared to the same quarter one year ago, dropping from -$2,830.00 million to -$2,851.00 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, BARRICK GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: ABX Ratings Report

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