Gold Fields (GFI) Is Today's Dead Cat Bounce Stock

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 $15.6 million.
  • GFI has traded 201,142 shares today.
  • GFI is up 3.1% today.
  • GFI was down 8.3% yesterday.

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More details on GFI:

Gold Fields Limited is engaged in the acquisition, exploration, development, and production of gold properties. It also explores for copper. The company holds interests in eight operating mines in Australia, Ghana, Peru, and South Africa. The stock currently has a dividend yield of 0.9%. GFI has a PE ratio of 4.0. Currently there are 2 analysts that rate 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 $2.8 billion and is part of the basic materials sector and metals & mining industry. Shares are up 8.8% 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 Gold Fields as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and disappointing return on equity.

Highlights from the ratings report include:
  • GFI'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 27.66%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • 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 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.
  • Despite currently having a low debt-to-equity ratio of 0.51, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
  • GOLD FIELDS LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GOLD FIELDS LTD swung to a loss, reporting -$0.78 versus $0.44 in the prior year. This year, the market expects an improvement in earnings ($0.13 versus -$0.78).
  • 35.57% is the gross profit margin for GOLD FIELDS LTD which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, GFI's net profit margin of 2.61% significantly trails the industry average.

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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