Gold Fields (GFI) Stock Lower on Falling Gold Prices

NEW YORK (TheStreet) -- Shares of Gold Fields (GFI) were falling 3.6% to $3.26 Thursday afternoon as gold prices declined.

U.S. gold futures for August delivery were down 0.6% to $1,177.40 an ounce on the Comex Thursday afternoon after hitting a one-month low of $1,174.90 an ounce earlier in the day.

Gold prices were falling ahead of the U.S. jobs report on Friday, according to Reuters. The U.S. Federal Reserve may soon raise interest rates for the first time nearly a decade depending on the data in the report, according to the news service.

"A lot of (gold's weakness) is pricing in expectations for a fairly positive non-farm payrolls reading tomorrow," Mitsubishi analyst Jonathan Butler told Reuters. "All things being equal, it should have been another pretty solid month of gains."

Gold Fields is a gold mining company based in South Africa.

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

"We rate GOLD FIELDS LTD (GFI) a SELL. This is driven by several 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, poor profit margins and weak operating cash flow."

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 4533.3% when compared to the same quarter one year ago, falling from -$0.30 million to -$13.90 million.
  • The gross profit margin for GOLD FIELDS LTD is currently lower than what is desirable, coming in at 33.77%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.27% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $150.20 million or 24.10% when compared to the same quarter last year. Despite a decrease in cash flow GOLD FIELDS LTD is still fairing well by exceeding its industry average cash flow growth rate of -35.64%.
  • 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 on the basis of return on equity, GOLD FIELDS LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Despite currently having a low debt-to-equity ratio of 0.56, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
  • You can view the full analysis from the report here: GFI Ratings Report

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