Post-Market Laggard: Barrick Gold (ABX)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Barrick Gold ( ABX) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Barrick Gold as such a stock due to the following factors:

  • ABX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $124.5 million.
  • ABX is down 2.1% today from today's close.

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More details on ABX:

Barrick Gold Corporation produces and sells gold and copper. The company is also involved in exploration and mine development activities. The stock currently has a dividend yield of 1.5%. Currently there are 2 analysts that rate Barrick Gold a buy, 1 analyst rates it a sell, and 13 rate it a hold.

The average volume for Barrick Gold has been 12.8 million shares per day over the past 30 days. Barrick has a market cap of $15.4 billion and is part of the basic materials sector and metals & mining industry. Shares are up 16% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Barrick Gold as a sell. 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 ratings report include:
  • 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. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The share price of BARRICK GOLD CORP has not done very well: it is down 24.26% 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.
  • 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.

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