Trade-Ideas LLC identified

Barrick Gold

(

ABX

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Barrick Gold as such a stock due to the following factors:

  • ABX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $141.7 million.
  • ABX has traded 73,921 shares today.
  • ABX is down 3% today.
  • ABX was up 10.4% yesterday.

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More details on ABX:

Barrick Gold Corporation produces and sells gold and copper. The company is also involved in exploration and mine development activities. The stock currently has a dividend yield of 1.3%. Currently there are 5 analysts that rate Barrick Gold a buy, 1 analyst rates it a sell, and 10 rate it a hold.

The average volume for Barrick Gold has been 21.9 million shares per day over the past 30 days. Barrick has a market cap of $7.1 billion and is part of the basic materials sector and metals & mining industry. Shares are down 44.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Barrick Gold as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • The debt-to-equity ratio of 1.26 is relatively high when compared with the industry average, suggesting a need for better debt level management.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Metals & Mining industry and the overall market, BARRICK GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • ABX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 57.91%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • Despite the weak revenue results, ABX has significantly outperformed against the industry average of 45.0%. Since the same quarter one year prior, revenues slightly dropped by 9.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 41.46% is the gross profit margin for BARRICK GOLD CORP which we consider to be strong. Regardless of ABX's high profit margin, it has managed to decrease from the same period last year.

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