Goldcorp (GG) Stock Rising as Gold Prices Jump

NEW YORK (TheStreet) --Shares of Goldcorp (GG) are gaining by 1.86% to $16.95 in mid-morning trading on Thursday, as some mining and related stocks soar due to the rally in gold prices.

Gold for August delivery is higher by 2.07% to $1,201.10 per ounce on the COMEX this morning.

The precious metal is climbing following a retreat in the dollar and as the Fed says it will raise interest rates at a slow pace, MarketWatch reports.

It is possible that in September the Federal Reserve will hike up interest rates for the first time since 2006.

"(The Fed was) a bit more dovish than the market had expected considering the improvement in economic data since the last meeting. Two quarter-percentage-point hikes before the end of the year could easily become just one if Greek worries, a strong dollar and low inflation outlook continue," Ole Hansen, an analyst at Saxo Bank told Reuters.

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 a number of negative factors, 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.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 29.94%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 254.54% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • 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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