Trade-Ideas: Buenaventura Mining (BVN) Is Today's "Perilous Reversal" Stock
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 Buenaventura Mining as such a stock due to the following factors:
- BVN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.9 million.
- BVN has traded 62,902 shares today.
- BVN is down 4.7% today.
- BVN was up 5.3% yesterday.
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More details on BVN:
Compania de Minas Buenaventura S.A.A., a precious metals company, engages in the exploration, mining, and processing of gold, silver, lead, zinc, and copper metals in Peru. Currently there are 2 analysts that rate Buenaventura Mining a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Buenaventura Mining has been 2.5 million shares per day over the past 30 days. Buenaventura has a market cap of $3.1 billion and is part of the basic materials sector and metals & mining industry. Shares are up 200.9% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Buenaventura 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 expanding profit margins. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.
Highlights from the ratings report include:
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- 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 197.7% when compared to the same quarter one year prior, rising from $17.32 million to $51.56 million.
- BVN's debt-to-equity ratio is very low at 0.20 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 0.70 is somewhat weak and could be cause for future problems.
- Despite the weak revenue results, BVN has significantly outperformed against the industry average of 45.6%. Since the same quarter one year prior, revenues slightly dropped by 5.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- 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, MINAS BUENAVENTURA SA underperformed against that of the industry average and is significantly less than that of the S&P 500.
- You can view the full Buenaventura Mining Ratings Report.
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