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 Turquoise Hill Resources ( TRQ) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Turquoise Hill Resources as such a stock due to the following factors:
- TRQ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.5 million.
- TRQ has traded 1.8 million shares today.
- TRQ is up 3.1% today.
- TRQ was down 5.3% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in TRQ with the Ticky from Trade-Ideas. See the FREE profile for TRQ NOW at Trade-Ideas More details on TRQ: Turquoise Hill Resources Ltd., together with its subsidiaries, operates as a mineral exploration, development, and mining company. The company's principal mineral resource property includes the Oyu Tolgoi project, a copper-gold project located in the South Gobi region of Mongolia. Currently there is 1 analyst that rates Turquoise Hill Resources a buy, 1 analyst rates it a sell, and 1 rates it a hold. The average volume for Turquoise Hill Resources has been 3.5 million shares per day over the past 30 days. Turquoise Hill has a market cap of $6.9 billion and is part of the basic materials sector and metals & mining industry. Shares are down 2.1% 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 Turquoise Hill Resources as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself. Highlights from the ratings report include:
- The gross profit margin for TURQUOISE HILL RESOURCES LTD is rather low; currently it is at 20.81%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, TRQ's net profit margin of -44.68% significantly underperformed when compared to the industry average.
- Net operating cash flow has decreased to -$148.22 million or 25.57% when compared to the same quarter last year. Despite a decrease in cash flow TURQUOISE HILL RESOURCES LTD is still fairing well by exceeding its industry average cash flow growth rate of -37.47%.
- TRQ's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 38.54%, which is also worse than the performance of the S&P 500 Index. 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.
- The company, on the basis of net income growth 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 increased by 0.6% when compared to the same quarter one year prior, going from -$50.86 million to -$50.56 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, TURQUOISE HILL RESOURCES LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.
- You can view the full Turquoise Hill Resources 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.