Allied Nevada Gold (ANV) Showing Signs Of Perilous Reversal Today

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 Allied Nevada Gold ( ANV) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Allied Nevada Gold as such a stock due to the following factors:

  • ANV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.5 million.
  • ANV has traded 15.6 million shares today.
  • ANV is down 3.2% today.
  • ANV was up 5.9% yesterday.

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More details on ANV:

Allied Nevada Gold Corp., a gold and silver producer, focuses on the mining, development, and exploration of properties in Nevada. The company's principal products include unrefined gold and silver bars. ANV has a PE ratio of 9.7. Currently there is 1 analyst that rates Allied Nevada Gold a buy, 2 analysts rate it a sell, and 3 rate it a hold.

The average volume for Allied Nevada Gold has been 5.4 million shares per day over the past 30 days. Allied Nevada has a market cap of $465.7 million and is part of the basic materials sector and metals & mining industry. The stock has a beta of 0.91 and a short float of 22% with 4.13 days to cover. Shares are down 85.1% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Allied Nevada Gold as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and disappointing return on equity.

Highlights from the ratings report include:
  • ANV's very impressive revenue growth greatly exceeded the industry average of 1.6%. Since the same quarter one year prior, revenues leaped by 75.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • ANV's debt-to-equity ratio of 0.76 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that ANV's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.19 is high and demonstrates strong liquidity.
  • Net operating cash flow has significantly decreased to -$18.75 million or 52.61% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • 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 31.1% when compared to the same quarter one year ago, falling from $6.14 million to $4.23 million.

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