NEW YORK (TheStreet) -- Allied Nevada Gold (ANV) shares are jumping, up 7.4% to $3.47, following reports that the company saw a significant increase in short interest during May.
There was short interest totaling 34,337,941 shares, up nearly 1% from the previous month, at the end of May representing about 36% of the company's total shares.
The company released its first quarter earnings results on May 5, earning 1 cent per diluted share, 9 cents ahead of analysts estimates. Revenue for the quarter came in at $85.5 million, also ahead of analysts $83.5 million estimate.
TheStreet Ratings team rates ALLIED NEVADA GOLD CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ALLIED NEVADA GOLD CORP (ANV) a SELL. This is driven by several weaknesses, 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 feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and generally high debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ALLIED NEVADA GOLD CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, ALLIED NEVADA GOLD CORP reported lower earnings of $0.01 versus $0.52 in the prior year. For the next year, the market is expecting a contraction of 3860.0% in earnings (-$0.38 versus $0.01).
- 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 96.2% when compared to the same quarter one year ago, falling from $8.82 million to $0.33 million.
- 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, ALLIED NEVADA GOLD CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for ALLIED NEVADA GOLD CORP is currently lower than what is desirable, coming in at 34.10%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 0.38% significantly trails the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 67.07%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 100.00% compared to the year-earlier 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.
- You can view the full analysis from the report here: ANV Ratings Report