Today's Perilous Reversal Stock: Yamana Gold (AUY)
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.
Trade-Ideas LLC identified
(
) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Yamana Gold as such a stock due to the following factors:
- AUY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $33.6 million.
- AUY has traded 662,098 shares today.
- AUY is down 3.2% today.
- AUY was up 5.6% yesterday.
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More details on AUY:
Yamana Gold Inc. is engaged in gold mining and related activities, including exploration, extraction, processing, and reclamation. The company has precious metal properties and land positions throughout the Americas, including in Brazil, Chile, Argentina, and Mexico. The stock currently has a dividend yield of 1.7%. Currently there are 10 analysts that rate Yamana Gold a buy, 1 analyst rates it a sell, and 3 rate it a hold.
The average volume for Yamana Gold has been 12.8 million shares per day over the past 30 days. Yamana has a market cap of $3.1 billion and is part of the basic materials sector and metals & mining industry. Shares are down 6.7% year-to-date as of the close of trading on Friday.
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Analysis:
rates Yamana Gold as a
. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally high debt management risk.
Highlights from the ratings report include:
- 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 132.7% when compared to the same quarter one year ago, falling from -$583.89 million to -$1,358.57 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, YAMANA GOLD INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for YAMANA GOLD INC is currently extremely low, coming in at 2.08%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, AUY's net profit margin of -250.22% significantly underperformed when compared to the industry average.
- Net operating cash flow has declined marginally to $183.13 million or 0.92% when compared to the same quarter last year. Despite a decrease in cash flow YAMANA GOLD INC is still fairing well by exceeding its industry average cash flow growth rate of -47.05%.
- Despite currently having a low debt-to-equity ratio of 0.31, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.33 is very low and demonstrates very weak liquidity.
- You can view the full Yamana Gold Ratings Report.
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