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Trade-Ideas: Allied Nevada Gold (ANV) Is Today's "Perilous Reversal" Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Allied Nevada Gold ( ANV) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Allied Nevada Gold as such a stock due to the following factors:

  • ANV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $31.1 million.
  • ANV has traded 5.0 million shares today.
  • ANV is down 3.5% today.
  • ANV was up 7.2% yesterday.

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More details on ANV:

Allied Nevada Gold Corp., a gold and silver producer, focuses on the mining, development, and exploration of properties in Nevada. The company's principal products include unrefined gold and silver bars. ANV has a PE ratio of 9.8. Currently there is 1 analyst that rates Allied Nevada Gold a buy, 2 analysts rate it a sell, and 3 rate it a hold.

The average volume for Allied Nevada Gold has been 4.0 million shares per day over the past 30 days. Allied Nevada has a market cap of $466.7 million and is part of the basic materials sector and metals & mining industry. The stock has a beta of 0.36 and a short float of 9% with 1.06 days to cover. Shares are down 85.1% year to date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Allied Nevada Gold as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 2.8%. Since the same quarter one year prior, revenues rose by 25.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • ANV's debt-to-equity ratio of 0.92 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that ANV's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.41 is high and demonstrates strong liquidity.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, ALLIED NEVADA GOLD CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Looking at the price performance of ANV's shares over the past 12 months, there is not much good news to report: the stock is down 83.25%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, ANV is still more expensive than most of the other companies in its industry.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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