Newmont Mining (NEM) Stock Slipping Amid Lower Gold Prices, Strong Jobs Data

NEW YORK (TheStreet) -- Shares of Newmont Mining Corp  (NEM) were slumping, down 3.99% to $25.73 in midday trading Friday, as gold price slip to trade in the red following some positive jobs data released earlier this morning, according to Reuters.

U.S. employment data for May, released at 8:30 a.m. ET, was better-than-expected. 

Non-farm payrolls rose by 280,000 last month, compared to the increase of 225,000 economists polled by Thomson Reuters had forecast.

The jobless rate came in slightly higher at 5.5%, versus the 5.4% economists were expecting.

The dollar rallied, up 1.1% versus a basket of currencies following the positive jobs data, Reuters reports.

A stronger dollar makes gold more expensive for holders of other currencies, Reuters added.

Spot gold reached its lowest level since March 19 at $1,162.35 an ounce earlier today before recovering to trade at $1,167.71 an ounce as of 12:29 p.m. ET today.

Gold for August Delivery was trading lower by 0.63% to $1,167.80 an ounce as of 12:23 p.m. ET today.

The precious metal is heading for a third consecutive weekly decline, Reuters noted.

Greenwood Village, Colo.-based Newmont Mining is primarily a gold producer with operations and assets in the U.S., Australia, Peru, Indonesia, Ghana, New Zealand and Mexico.

Separately, TheStreet Ratings team rates NEWMONT MINING CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate NEWMONT MINING CORP (NEM) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."

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

  • The revenue growth came in higher than the industry average of 17.4%. Since the same quarter one year prior, revenues rose by 11.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • 46.60% is the gross profit margin for NEWMONT MINING CORP which we consider to be strong. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.27% trails the industry average.
  • 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, NEWMONT MINING CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • NEM's debt-to-equity ratio of 0.62 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.11 is sturdy.
  • You can view the full analysis from the report here: NEM Ratings Report

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