Goldcorp (GG) Stock Retreating as Gold Futures Settle Lower

NEW YORK (TheStreet) -- Shares of Goldcorp (GG) were retreating, lower by 0.61% to $16.26 in afternoon trading Tuesday, as gold prices slump to settle in the red.

U.S. gold futures for August closed down at $1,171.80 an ounce, and at last check gold futures were lower by 0.58% to $1,172 an ounce as of 2:43 p.m. ET today.

Spot gold was barely changed at $1,171.75 an ounce as of 2:49 p.m. ET.

Gold prices fell as Greece formally requested a third Eurozone bail-out, asking for a reduction in the country's outstanding debt as investors remain cautious over the precious metal's longer-term outlook, 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.

Canada-based Goldcorp is a gold producer engaged in the operation, exploration, development and acquisition of precious metal properties in Canada, the U.S., 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 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 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 39.52%, 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

If you liked this article you might like

These Stocks Have Changed Direction

These Stocks Have Changed Direction

Intermediate Trade: Goldcorp

Intermediate Trade: Goldcorp

5 Precious Metals Plays on the 'Trumpcare' Fallout

5 Precious Metals Plays on the 'Trumpcare' Fallout

Gold and Gold Stocks Lost Their Luster Since Post-Election Highs

Gold and Gold Stocks Lost Their Luster Since Post-Election Highs

Bullish and Bearish Reversals in the Market

Bullish and Bearish Reversals in the Market