Yamana Gold Inc (AUY): Today's Featured Basic Materials Winner

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Yamana Gold ( AUY) pushed the Basic Materials sector higher today making it today's featured basic materials winner. The sector as a whole closed the day down 2.6%. By the end of trading, Yamana Gold rose 39 cents (2%) to $20.13 on average volume. Throughout the day, 8.3 million shares of Yamana Gold exchanged hands as compared to its average daily volume of 5.8 million shares. The stock ranged in a price between $19.57-$20.18 after having opened the day at $19.94 as compared to the previous trading day's close of $19.74. Other companies within the Basic Materials sector that increased today were: HyperDynamics Corporation ( HDY), up 13.5%, Altair Nanotechnologies ( ALTI), up 9.4%, PostRock Energy ( PSTR), up 8.8%, and Coeur D'Alene Mines Corporation ( CDE), up 8.2%.
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Yamana Gold Inc. engages in the exploration, development, and production of mineral properties, primarily gold. It also explores for copper, molybdenum, zinc, and silver metals. Yamana Gold has a market cap of $14.35 billion and is part of the metals & mining industry. The company has a P/E ratio of 39.8, above the S&P 500 P/E ratio of 17.7. Shares are up 30% year to date as of the close of trading on Tuesday. Currently there are 14 analysts that rate Yamana Gold a buy, no analysts rate it a sell, and two rate it a hold.

TheStreet Ratings rates Yamana Gold as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

On the negative front, James River Coal Company ( JRCC), down 30%, BMB Munai ( BMBM), down 19.4%, Petroquest Energy ( PQ), down 17.8%, and China Shen Zhou Mining & Resources ( SHZ), down 13.8%, were all laggards within the basic materials sector with Halliburton Company ( HAL) being today's basic materials sector laggard.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the basic materials sector could consider Materials Select Sector SPDR ( XLB) while those bearish on the basic materials sector could consider ProShares Short Basic Materials Fd ( SBM).

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