Trade-Ideas LLC identified

Buenaventura Mining

(

BVN

) 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 $20.6 million.
  • BVN has traded 676,244 shares today.
  • BVN is down 3.1% today.
  • BVN was up 13% 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 3 rate it a hold.

The average volume for Buenaventura Mining has been 2.2 million shares per day over the past 30 days. Buenaventura has a market cap of $1.6 billion and is part of the basic materials sector and metals & mining industry. Shares are up 65% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Buenaventura Mining as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

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 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.
  • The gross profit margin for MINAS BUENAVENTURA SA is currently lower than what is desirable, coming in at 27.80%. It has decreased from the same quarter the previous year.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 42.91%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 82.25% compared to the year-earlier 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.
  • MINAS BUENAVENTURA SA has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, MINAS BUENAVENTURA SA reported poor results of -$1.20 versus -$0.18 in the prior year. This year, the market expects an improvement in earnings (-$0.06 versus -$1.20).
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Metals & Mining industry average, but is less than that of the S&P 500. The net income has significantly decreased by 81.3% when compared to the same quarter one year ago, falling from -$161.38 million to -$292.55 million.

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