Anglogold Ashanti (AU) Marked As A Dead Cat Bounce Stock
Trade-Ideas LLC identified
(
) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Anglogold Ashanti as such a stock due to the following factors:
- AU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $84.6 million.
- AU has traded 216,661 shares today.
- AU is up 3% today.
- AU was down 5.6% yesterday.
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More details on AU:
AngloGold Ashanti Limited operates as a gold mining and exploration company. The company also produces silver, uranium oxide, copper, and sulphuric acid. Its portfolio includes 17 mines in South Africa, Continental Africa, Australasia, and the Americas. Currently there are 3 analysts that rate Anglogold Ashanti a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Anglogold Ashanti has been 4.5 million shares per day over the past 30 days. Anglogold Ashanti has a market cap of $8.4 billion and is part of the basic materials sector and metals & mining industry. Shares are up 197.3% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates Anglogold Ashanti as a
. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and increase in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.
Highlights from the ratings report include:
- Powered by its strong earnings growth of 260.00% and other important driving factors, this stock has surged by 154.89% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- ANGLOGOLD ASHANTI LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ANGLOGOLD ASHANTI LTD turned its bottom line around by earning $0.09 versus -$0.18 in the prior year. This year, the market expects an improvement in earnings ($1.12 versus $0.09).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, ANGLOGOLD ASHANTI LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Despite the weak revenue results, AU has outperformed against the industry average of 45.3%. Since the same quarter one year prior, revenues fell by 15.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The debt-to-equity ratio of 1.13 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, AU maintains a poor quick ratio of 0.94, which illustrates the inability to avoid short-term cash problems.
- You can view the full Anglogold Ashanti Ratings Report.
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