Strong On High Relative Volume: Allied Nevada Gold (ANV)

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 strong on high relative volume 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 $9.5 million.
  • ANV has traded 436,768 shares today.
  • ANV is trading at 4.11 times the normal volume for the stock at this time of day.
  • ANV is trading at a new high 3.08% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. 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. 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.

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More details on ANV:

Allied Nevada Gold Corp., a gold producer, is engaged in the mining, development, and exploration of properties in Nevada. The company's principal products comprise unrefined gold and silver bars. Currently there are no analysts that rate Allied Nevada Gold a buy, 3 analysts rate it a sell, and 1 rates it a hold.

The average volume for Allied Nevada Gold has been 2.7 million shares per day over the past 30 days. Allied Nevada has a market cap of $345.3 million and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.10 and a short float of 40% with 14.98 days to cover. Shares are up 0.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Allied Nevada Gold as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins, feeble growth in its earnings per share, generally high debt management risk and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • 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, ALLIED NEVADA GOLD CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for ALLIED NEVADA GOLD CORP is currently lower than what is desirable, coming in at 33.39%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.26% trails that of the industry average.
  • ALLIED NEVADA GOLD CORP reported flat earnings per share in the most recent quarter. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, ALLIED NEVADA GOLD CORP reported lower earnings of $0.01 versus $0.52 in the prior year. For the next year, the market is expecting a contraction of 2300.0% in earnings (-$0.22 versus $0.01).
  • ANV'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 26.36%, 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.
  • ANV's debt-to-equity ratio of 0.73 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. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.15 is very low and demonstrates very weak liquidity.

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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