NEW YORK (TheStreet) -- Shares of Barrick Gold (ABX) are rising by 3.08% to $13.23 on heavy volume in mid-day trading on Wednesday afternoon, as some mining and related stocks get a jolt from the rally in the price of gold.
Gold for June delivery is up by 1.90% to $1,215.10 per ounce on the COMEX this afternoon.
The price of the precious metal is being driven into the green by the dip in the dollar and disappointing U.S. employment data.
The dollar is lower by 0.92%, according to the Wall Street Journal dollar index. The price of commodities dominated by the greenback tends to increase when the currency goes soft.
Additionally, Barrick Gold and Glencore are both said to be looking into selling their joint nickel development project in Tanzania, sources told the Wall Street Journal, adding that the sales process may be difficult due to the volatility in the pricing of the metal.
The two mining companies each own half of the Kabanga nickel project. Barrick Gold is looking to sell assets in order to reduce its debt by $3 billion before the end of this year, the Journal noted.
Separately, 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 a number of negative factors, 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 generally high debt management risk, weak operating cash flow, generally disappointing historical performance in the stock itself and unimpressive growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio of 1.27 is relatively high when compared with the industry average, suggesting a need for better debt level management.
- Net operating cash flow has decreased to $316.00 million or 45.98% when compared to the same quarter last year. Despite a decrease in cash flow of 45.98%, BARRICK GOLD CORP is in line with the industry average cash flow growth rate of -46.77%.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 26.57%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 37.50% 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.
- 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 significantly decreased by 35.2% when compared to the same quarter one year ago, falling from $88.00 million to $57.00 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