B2Gold (BTG) Stock Gains on Rising Gold Prices

NEW YORK (TheStreet) -- Shares of B2Gold Corp. (BTG) were gaining 3.6% to $1.71 Wednesday as gold prices were climbing for the second day in a row.

U.S. gold future for June delivery were up 1.8% to $1,213.40 an ounce on the Comex Wednesday morning after reaching a five-week high of $1,218 an ounce earlier in the day.

Gold prices were rising as the U.S. dollar hit a three-month low as a result of disappointing U.S. employment data, according to Reuters. The dollar fell 0.7% against a basket of foreign currencies after the recent U.S. jobs report pushed back the expectations of the Federal Reserve raising interest rates.

"The dollar's weakening has been instrumental to the latest move higher and of course the view that the Fed is less likely to raise interest rates next month after weak economic data," ActivTrades chief analyst Carlo Alberto de Casa told Reuters.

B2Gold is a gold producer based in Canada with three operating mines including one in the Philippines and two in Nicaragua.

TheStreet Ratings team rates B2GOLD CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate B2GOLD CORP (BTG) a SELL. This is driven by a few notable 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 and generally disappointing historical performance in the stock itself."

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

  • B2GOLD 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, B2GOLD CORP swung to a loss, reporting -$0.84 versus $0.07 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 1456.3% when compared to the same quarter one year ago, falling from $26.22 million to -$355.63 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, B2GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 44.41%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 2050.00% compared to the year-earlier 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.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 18.2%. Since the same quarter one year prior, revenues fell by 11.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: BTG Ratings Report
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