Gold for August delivery is down by 2.33% to $1,105.50 per ounce on the COMEX this afternoon.
On Monday morning, gold prices slipped to a five-year low after the Chinese government reduced its gold holdings, MSNBC.com reports.
"People are worried about the fact that if China starts to falter, the general public there will also start to sell their gold and that would be a big problem for the gold market more widely," a trader at a U.S. fund told Reuters.
China has increased its gold reserves in the past six years, but gold now accounts for 1.65% of China's foreign exchange reserves, compared with 1.8% in 2009, Reuters reported.
Coeur d'Alene, Idaho-based Hecla Mining extracts silver, gold, lead and zinc to produce concentrates and unrefined bullion bars.
Separately, TheStreet Ratings team rates HECLA MINING CO as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate HECLA MINING CO (HL) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 7.8% when compared to the same quarter one year prior, going from $11.64 million to $12.55 million.
- The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 2.70, which clearly demonstrates the ability to cover short-term cash needs.
- Despite the weak revenue results, HL has outperformed against the industry average of 17.8%. Since the same quarter one year prior, revenues slightly dropped by 5.3%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- Net operating cash flow has decreased to $21.42 million or 29.50% when compared to the same quarter last year. Despite a decrease in cash flow HECLA MINING CO is still fairing well by exceeding its industry average cash flow growth rate of -54.90%.
- HL's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 26.92%, which is also worse than the performance of the S&P 500 Index. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- You can view the full analysis from the report here: HL Ratings Report