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 ( NEM) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Newmont Mining 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 $246.9 million.
- NEM has traded 2.6 million shares today.
- NEM is trading at 1.66 times the normal volume for the stock at this time of day.
- NEM crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in NEM with the Ticky from Trade-Ideas. See the FREE profile for NEM NOW at Trade-Ideas More details on NEM: Newmont Mining Corporation, together with its subsidiaries, acquires, explores for, and produces gold, copper, and silver deposits. The company's assets or operations are located in the United States, Australia, Peru, Indonesia, Ghana, New Zealand, Mexico, and Suriname. The stock currently has a dividend yield of 2.4%. Currently there are 2 analysts that rate Newmont Mining a buy, 4 analysts rate it a sell, and 10 rate it a hold. The average volume for Newmont Mining has been 10.3 million shares per day over the past 30 days. Newmont has a market cap of $12.9 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 0.02 and a short float of 3.8% with 1.78 days to cover. Shares are up 10.7% year-to-date as of the close of trading on Thursday. 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 Newmont Mining as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share. 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 273.3% when compared to the same quarter one year ago, falling from $673.00 million to -$1,166.00 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, NEWMONT MINING CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to $382.00 million or 54.63% 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.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 29.70%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 280.00% 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.
- NEWMONT MINING CORP 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, NEWMONT MINING CORP swung to a loss, reporting -$5.06 versus $3.78 in the prior year. This year, the market expects an improvement in earnings ($0.78 versus -$5.06).
- You can view the full Newmont Mining Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.