Trade-Ideas: Goldcorp (GG) Is Today's Weak On High Relative Volume Stock
Trade-Ideas LLC identified
(
) as a weak on high relative volume 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 $163.9 million.
- GG has traded 1.6 million shares today.
- GG is trading at 2.04 times the normal volume for the stock at this time of day.
- GG is trading at a new low 3.05% 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 GG:
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, lead, zinc, and copper. The stock currently has a dividend yield of 0.5%. Currently there are 8 analysts that rate Goldcorp a buy, 2 analysts rate it a sell, and 7 rate it a hold.
The average volume for Goldcorp has been 10.7 million shares per day over the past 30 days. Goldcorp has a market cap of $14.5 billion and is part of the basic materials sector and metals & mining industry. Shares are up 50.2% year-to-date as of the close of trading on Monday.
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Analysis:
rates Goldcorp as a
. 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- 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 191.9% when compared to the same quarter one year prior, rising from -$87.00 million to $80.00 million.
- GG's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.12, which illustrates the ability to avoid short-term cash problems.
- GOLDCORP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GOLDCORP INC reported poor results of -$5.06 versus -$2.67 in the prior year. This year, the market expects an improvement in earnings ($0.30 versus -$5.06).
- GG is off 7.00% from its price level of one year ago, reflecting the general market trend and ignoring their higher earnings per share compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. 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.
- You can view the full Goldcorp Ratings Report.
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