Trade-Ideas LLC identified

Goldcorp

(

GG

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Goldcorp as such a stock due to the following factors:

  • GG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $119.4 million.
  • GG has traded 12.6 million shares today.
  • GG traded in a range 201% of the normal price range with a price range of $1.45.
  • GG traded below its daily resistance level (quality: 26 days, meaning that the stock is crossing a resistance level set by the last 26 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on GG:

TheStreet Recommends

Goldcorp Inc. engages in the acquisition, exploration, development, and operation of precious metal properties in Canada, the United States, Mexico, and Central and South America. The company primarily explores for gold, silver, copper, lead, and zinc deposits. The stock currently has a dividend yield of 1.6%. Currently there are 14 analysts that rate Goldcorp a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Goldcorp has been 10.4 million shares per day over the past 30 days. Goldcorp has a market cap of $12.5 billion and is part of the basic materials sector and metals & mining industry. Shares are down 20.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Goldcorp as a

sell

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

Highlights from the ratings report include:

  • 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, GOLDCORP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • GG'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 31.90%, 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.
  • GOLDCORP INC 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, GOLDCORP INC continued to lose money by earning -$2.68 versus -$3.30 in the prior year. This year, the market expects an improvement in earnings ($0.21 versus -$2.68).
  • 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 116.6% when compared to the same quarter one year prior, rising from $181.00 million to $392.00 million.
  • 46.13% is the gross profit margin for GOLDCORP INC which we consider to be strong. It has increased from the same quarter the previous year.

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