Barrick Gold (ABX) Stock Lower Amid Decline in Gold Prices

NEW YORK (TheStreet) -- Shares of Barrick Gold (ABX) are down by 2.44% to $11.20 in late morning trading on Monday, as some mining and related stocks slump today due to the retreat in the price of gold.

Gold for August delivery is slipping by 1.45% to $1,184.50 per ounce on the COMEX this morning.

The precious metal is falling as global equities gain due to the possibility of progress being made in the stalled talks between Greece and its creditors, reducing safe-haven demand for the metal, Reuters reports.

"There's always that underlying feeling that a deal will be done ... but if there was a default, that would be when gold would likely rise to its traditional role as a hedge against a worst-case scenario," ETF Securities analyst Martin Arnold told Reuters.

Other gold producer stocks declining today include Goldcorp (GG), down by 1.15% to $16.28, and Newmont Mining (NEM), lower by 2.35% to $24.07 this morning.

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

"We rate BARRICK GOLD CORP (ABX) a SELL. This is driven by some concerns, 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 generally high debt management risk, weak operating cash flow, generally disappointing historical performance in the stock itself and unimpressive growth in net income."

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

  • The debt-to-equity ratio of 1.27 is relatively high when compared with the industry average, suggesting a need for better debt level management.
  • Net operating cash flow has decreased to $316.00 million or 45.98% 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 32.71%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 37.50% 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 change in net income from the same quarter one year ago has exceeded that of the Metals & Mining industry average, but is less than that of the S&P 500. The net income has significantly decreased by 35.2% when compared to the same quarter one year ago, falling from $88.00 million to $57.00 million.
  • 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, BARRICK GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: ABX Ratings Report

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