NEW YORK (TheStreet) -- Shares of IAMGOLD Corp. (IAG - Get Report) are higher by 7.22% to $2.01 in mid-afternoon trading on Wednesday, as mining stocks are driven into the green today due to the rise in the price of gold. The precious metal is climbing as a result of a weak dollar.
Gold for June delivery is soaring by 1.81% to $1,204.60 per ounce on the COMEX this afternoon.
The dollar is down today following a poorer than expected ADP private jobs data report, which raised expectations the Fed may be more cautious in tightening monetary policy, Reuters reports, adding that concerns regarding Friday's pending jobs report could also showcase worsening conditions in the labor market.
"There is so much discord in the U.S. data that it is difficult to find what exactly the next report is going to be. It's the uncertainty that pushes people towards safe-haven assets such as gold," ING Bank senior strategist Hamza Khan told Reuters.
A strong report on Friday could raise notions that the Fed will raise interest rates sooner rather than later. However, a worse than expected report may support views that the Fed won't issue a rate hike until next year, Reuters noted.
Separately, 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 poor profit margins and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for IAMGOLD CORP is currently extremely low, coming in at 12.11%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, IAG's net profit margin of -44.77% significantly underperformed when compared to the industry average.
- IAG'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 40.47%, 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 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, IAMGOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Although IAG's debt-to-equity ratio of 0.26 is very low, it is currently higher than that of the industry average. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.76 is somewhat weak and could be cause for future problems.
- IAMGOLD CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, IAMGOLD CORP continued to lose money by earning -$0.72 versus -$2.29 in the prior year.
- You can view the full analysis from the report here: IAG Ratings Report