Why Gold Fields (GFI) Stock is Skyrocketing Today - TheStreet
For the 2015 third quarter, the Johannesburg, South Africa-based gold producer reported a 42% rise in gold production to 60,283 ounces at the mine, the company's last remaining South African asset.
"We are looking at about a 50% improvement in production in the second half versus the first half," Gold Fields CEO Nick Holland told Bloomberg. "The team under Nico Muller [the mine's manager] are starting to get to grips with a lot of the issues, so we expect quarter four to be better than quarter three."
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The company's net earnings for the third quarter grew by 50% year over year to $18 million.
Separately, TheStreet Ratings team rates GOLD FIELDS LTD as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
We rate GOLD FIELDS LTD (GFI) 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. Among the areas we feel are negative, one of the most important has been weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has decreased to $191.30 million or 13.16% when compared to the same quarter last year. Despite a decrease in cash flow GOLD FIELDS LTD is still fairing well by exceeding its industry average cash flow growth rate of -55.31%.
- 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 on the basis of return on equity, GOLD FIELDS LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The change in net income from the same quarter one year ago has significantly 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 40.0% when compared to the same quarter one year ago, falling from $19.50 million to $11.70 million.
- Despite currently having a low debt-to-equity ratio of 0.56, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
- Despite the weak revenue results, GFI has significantly outperformed against the industry average of 45.4%. Since the same quarter one year prior, revenues fell by 11.6%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- You can view the full analysis from the report here:
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Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.
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