Today's Dead Cat Bounce Stock: Buenaventura Mining (BVN)

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 Buenaventura Mining ( BVN) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Buenaventura Mining as such a stock due to the following factors:

  • BVN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.5 million.
  • BVN has traded 92,064 shares today.
  • BVN is up 3% today.
  • BVN was down 8.6% yesterday.

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More details on BVN:

Compania de Minas Buenaventura S.A.A., a precious metals company, is engaged in the exploration, mining, and processing of gold and silver. It also explores for other metals, including lead, zinc, and copper. The stock currently has a dividend yield of 0.2%. Currently there is 1 analyst that rates Buenaventura Mining a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Buenaventura Mining has been 1.6 million shares per day over the past 30 days. Buenaventura has a market cap of $2.6 billion and is part of the basic materials sector and metals & mining industry. Shares are down 18% year-to-date as of the close of trading on Friday.

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 Buenaventura Mining as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, generally disappointing historical performance in the stock itself and disappointing return on equity.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to $41.76 million or 50.75% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, MINAS BUENAVENTURA SA has marginally lower results.
  • 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, MINAS BUENAVENTURA SA has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • BVN'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 29.68%, 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. 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.
  • MINAS BUENAVENTURA SA has improved earnings per share by 28.6% 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, MINAS BUENAVENTURA SA swung to a loss, reporting -$0.40 versus $2.77 in the prior year. This year, the market expects an improvement in earnings ($0.56 versus -$0.40).
  • 48.63% is the gross profit margin for MINAS BUENAVENTURA SA which we consider to be strong. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.56% 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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