Harmony Gold Mining (HMY) Stock Tumbling on Lower Gold Prices

NEW YORK (TheStreet) -- Shares of Harmony Gold Mining Co.  (HMY) were tumbling by 5.67% to $1.32 in late morning trading Tuesday, amid the slump in gold prices.

U.S. gold futures for August delivery were lower by 0.84% to $1,169.10 an ounce as of 11:29 a.m. ET today, while spot gold was barely changed at $1,170.40 an ounce.

Gold prices fell as Greece formally requested a third Eurozone bail-out, asking for a reduction in the country's outstanding debt, Reuters reports.

The troubled country is asking for a new two-year aid deal, which the Eurozone finance ministers will discuss in a teleconference tonight, BBC reports.

If Greece fails to repay the International Monetary Fund loan, Greece risks exiting the Eurozone.

Gold often rallies during times of financial market turmoil, but has found little support from safe-haven bids, according to Reuters.

South Africa-based Harmony Gold Mining is a gold mining and exploration company, operating 11 underground mines, one open-pit mine and several surface operations.

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

"We rate HARMONY GOLD MINING CO LTD (HMY) 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, 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 665.1% when compared to the same quarter one year ago, falling from $2.98 million to -$16.81 million.
  • The gross profit margin for HARMONY GOLD MINING CO LTD is rather low; currently it is at 16.82%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -6.78% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $27.21 million or 61.62% 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 52.74%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 500.00% 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, HARMONY GOLD MINING CO LTD'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: HMY Ratings Report

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