Goldcorp (GG) Stock Down as Gold Prices Slip

NEW YORK (TheStreet) -- Shares of Goldcorp (GG) are lower by 1.13% to $17.55 in late morning trading on Thursday, as the price of the precious metal falls following data showing requests for jobless benefits fell for the week ended May 30.

For the final week in May 276,000 people had applied for unemployment benefits, a decline of 8,000 compared to the previous week, MarketWatch reports.

The data comes ahead of Friday's jobs report, which is expected to be strong and reinforce expectations that the Fed will move to increase interest rates sooner rather than later. This could be a problem for gold as it doesn't bear interest, MarketWatch added.

Gold for August delivery is lower by 0.93% to $1,173.90 per ounce on the COMEX this morning.

Other gold mining and producing stocks falling today include Yamana Gold (AUY), down by 0.97% to $3.65, Alamos Gold (AGI), lower by 1.27% to $6.22, and Barrick Gold (ABX), down by 2.50% to $11.69 this morning.

Separately, TheStreet Ratings team rates GOLDCORP INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate GOLDCORP INC (GG) 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 unimpressive growth in net income, weak operating cash flow and generally disappointing historical performance in the stock itself."

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

  • 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 188.8% when compared to the same quarter one year ago, falling from $98.00 million to -$87.00 million.
  • Net operating cash flow has significantly decreased to $58.00 million or 78.75% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The share price of GOLDCORP INC has not done very well: it is down 23.04% 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 return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market, GOLDCORP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • 39.04% is the gross profit margin for GOLDCORP INC which we consider to be strong. Regardless of GG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GG's net profit margin of -8.55% significantly underperformed when compared to the industry average.
  • You can view the full analysis from the report here: GG Ratings Report

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