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Trade-Ideas: Newmont Mining Corporation (NEM) Is Today's Pre-Market Laggard 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 Newmont Mining Corporation ( NEM) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Newmont Mining Corporation as such a stock due to the following factors:

  • NEM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $224.9 million.
  • NEM traded 35,523 shares today in the pre-market hours as of 9:05 AM.
  • NEM is down 3.4% today from yesterday's close.

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More details on NEM:

Newmont Mining Corporation, together with its subsidiaries, engages in the acquisition, exploration, and production of gold and copper properties. The company's assets or operations are located in the United States, Australia, Peru, Indonesia, Ghana, Mexico, and New Zealand. The stock currently has a dividend yield of 3.3%. Currently there are 4 analysts that rate Newmont Mining Corporation a buy, 3 analysts rate it a sell, and 8 rate it a hold.

The average volume for Newmont Mining Corporation has been 9.2 million shares per day over the past 30 days. Newmont has a market cap of $11.9 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of -0.01 and a short float of 3.4% with 1.55 days to cover. Shares are up 7.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Newmont Mining Corporation as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and generally high debt management risk.

Highlights from the ratings report include:

  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, NEWMONT MINING CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Net operating cash flow has decreased to $440.00 million or 23.34% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • NEM'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 43.77%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • Despite currently having a low debt-to-equity ratio of 0.57, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that NEM's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.63 is low and demonstrates weak liquidity.
  • NEM, with its decline in revenue, underperformed when compared the industry average of 3.2%. Since the same quarter one year prior, revenues fell by 20.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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