Goldcorp (GG) Stock Down as Gold Prices Slip

NEW YORK (TheStreet) --Shares of Goldcorp (GG) are slipping by 2.20% to $16.93 in mid-afternoon trading on Thursday, as a strong dollar drives the price of gold and mining stocks lower today.

Gold for August delivery is retreating by 0.57% to $1,179.80 per ounce on the COMEX this afternoon.

The dollar is up by 0.57% this afternoon, according to The Wall Street Journal dollar index. The greenback is gaining on positive U.S. economic data.

"If we get further good data and the dollar appreciates, we wouldn't rule out a fall to $1,100 over the next couple of months until the Fed starts raising interest rates," Commerzbank analyst Daniel Briesemann told Reuters.

Goldcorp is a Vancouver, BC.-based gold producer that focuses on the acquisition, exploration, development, and operation of gold properties in the U.S., Canada, Mexico, and Central and South America.

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 to the industry average, the firm's growth rate is much lower.
  • The share price of GOLDCORP INC has not done very well: it is down 23.42% 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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