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 or Stephanie Link.

Trade-Ideas LLC identified

Gold Resource

(

GORO

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Gold Resource as such a stock due to the following factors:

  • GORO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.9 million.
  • GORO has traded 91,188 shares today.
  • GORO is trading at 2.47 times the normal volume for the stock at this time of day.
  • GORO is trading at a new low 3.09% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on GORO:

Gold Resource Corporation is engaged in the exploration for and production of gold and silver in Mexico. The company also explores for copper, lead, and zinc. The stock currently has a dividend yield of 3.8%. GORO has a PE ratio of 19.8. Currently there is 1 analyst that rates Gold Resource a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Gold Resource has been 657,300 shares per day over the past 30 days. Gold Resource has a market cap of $171.7 million and is part of the basic materials sector and metals & mining industry. The stock has a beta of 0.17 and a short float of 8.9% with 2.80 days to cover. Shares are down 33.5% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Gold Resource as a

hold

. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Metals & Mining industry average. The net income increased by 20.5% when compared to the same quarter one year prior, going from -$1.83 million to -$1.46 million.
  • GORO's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GORO has a quick ratio of 1.76, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 38.13% is the gross profit margin for GOLD RESOURCE CORP which we consider to be strong. Regardless of GORO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GORO's net profit margin of -6.91% significantly underperformed when compared to the industry average.
  • 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. When compared to other companies in the Metals & Mining industry and the overall market, GOLD RESOURCE CORP's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • GORO'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 38.47%, which is also worse than the performance of the S&P 500 Index. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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