Today's Dead Cat Bounce Stock: Harmony Gold Mining (HMY)
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 Harmony Gold Mining as such a stock due to the following factors:
- HMY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.1 million.
- HMY has traded 170,206 shares today.
- HMY is up 3.4% today.
- HMY was down 8.9% yesterday.
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More details on HMY:
Harmony Gold Mining Company Limited engages in the exploration and mining of gold in South Africa and Papua New Guinea. The company also explores for copper, silver, uranium, and molybdenum deposits. Currently there is 1 analyst that rates Harmony Gold Mining a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Harmony Gold Mining has been 5.3 million shares per day over the past 30 days. Harmony has a market cap of $2.0 billion and is part of the basic materials sector and metals & mining industry. Shares are up 384.4% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates Harmony Gold Mining as a
. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.
Highlights from the ratings report include:
- Powered by its strong earnings growth of 111.76% and other important driving factors, this stock has surged by 275.00% 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.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 112.1% when compared to the same quarter one year prior, rising from -$73.68 million to $8.94 million.
- HMY's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.80 is somewhat weak and could be cause for future problems.
- The gross profit margin for HARMONY GOLD MINING CO LTD is currently lower than what is desirable, coming in at 27.15%. Despite the low profit margin, it has increased significantly from the same period last year.
- 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, HARMONY GOLD MINING CO LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Harmony Gold Mining Ratings Report.
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