Trade-Ideas: Newmont Mining Corporation (NEM) Is Today's Weak On High Relative Volume Stock

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 Newmont Mining Corporation ( NEM) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Newmont Mining Corporation as such a stock due to the following factors:

  • NEM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $236.0 million.
  • NEM has traded 8.5 million shares today.
  • NEM is trading at 2.51 times the normal volume for the stock at this time of day.
  • NEM is trading at a new low 3.01% 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 NEM:

Newmont Mining Corporation, together with its subsidiaries, engages in the acquisition, exploration, and production of gold and copper properties. The company's assets or operations are located in the United States, Australia, Peru, Indonesia, Ghana, Mexico, and New Zealand. The stock currently has a dividend yield of 4.5%. NEM has a PE ratio of 9.4. Currently there are 5 analysts that rate Newmont Mining Corporation a buy, 3 analysts rate it a sell, and 9 rate it a hold.

The average volume for Newmont Mining Corporation has been 8.8 million shares per day over the past 30 days. Newmont has a market cap of $15.3 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of -0.06 and a short float of 4.2% with 2.99 days to cover. Shares are down 32.9% year to date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Newmont Mining Corporation as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.84 is somewhat weak and could be cause for future problems.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 37.17%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 43.24% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • Net operating cash flow has decreased to $433.00 million or 28.89% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, NEWMONT MINING CORP has marginally lower results.

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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