Trade-Ideas: McEwen Mining (MUX) Is Today's

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 McEwen Mining ( MUX) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified McEwen Mining as such a stock due to the following factors:

  • MUX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.8 million.
  • MUX has traded 2.2 million shares today.
  • MUX is up 3.1% today.
  • MUX was down 5.1% yesterday.

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More details on MUX:

McEwen Mining Inc. engages in the exploration for, development of, production, and sale of gold, silver, and copper. Currently there is 1 analyst that rates McEwen Mining a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for McEwen Mining has been 3.5 million shares per day over the past 30 days. McEwen has a market cap of $634.2 million and is part of the basic materials sector and metals & mining industry. The stock has a beta of 2.31 and a short float of 14.7% with 4.21 days to cover. Shares are down 37.1% 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 McEwen Mining as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 531.9% when compared to the same quarter one year ago, falling from -$20.36 million to -$128.68 million.
  • 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, MCEWEN MINING INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 45.22%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 437.50% 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.
  • MCEWEN MINING INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, MCEWEN MINING INC continued to lose money by earning -$0.26 versus -$0.45 in the prior year. This year, the market expects an improvement in earnings ($0.00 versus -$0.26).
  • MUX has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.65, which clearly demonstrates the ability to cover short-term cash needs.

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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