Gold Fields (GFI) Showing Signs Of A Dead Cat Bounce 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 Gold Fields ( GFI) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Gold Fields as such a stock due to the following factors:

  • GFI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.0 million.
  • GFI has traded 1.2 million shares today.
  • GFI is up 3.3% today.
  • GFI was down 5.6% yesterday.

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More details on GFI:

Gold Fields Limited engages in the acquisition, exploration, development, and production of gold properties. It also explores for copper. The company holds interests in six operating mines in South Africa, Peru, Ghana, and Australia. The stock currently has a dividend yield of 8.2%. GFI has a PE ratio of 3.6. Currently there is 1 analyst that rates Gold Fields a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Gold Fields has been 5.6 million shares per day over the past 30 days. Gold Fields has a market cap of $2.4 billion and is part of the basic materials sector and metals & mining industry. Shares are down 75.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Gold Fields as a hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:
  • GFI, with its decline in revenue, underperformed when compared the industry average of 3.8%. Since the same quarter one year prior, revenues fell by 20.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.49, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, GOLD FIELDS LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • GOLD FIELDS LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, GOLD FIELDS LTD reported lower earnings of $0.60 versus $1.33 in the prior year. For the next year, the market is expecting a contraction of 53.3% in earnings ($0.28 versus $0.60).
  • 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 99.2% when compared to the same quarter one year ago, falling from $170.30 million to $1.40 million.

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