Today's Dead Cat Bounce Stock: Kinross Gold (KGC)

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

  • KGC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $36.9 million.
  • KGC has traded 8.7 million shares today.
  • KGC is up 3.3% today.
  • KGC was down 13.7% yesterday.

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More details on KGC:

Kinross Gold Corporation, together with its subsidiaries, is engaged in mining and processing gold and silver ores. It is involved in the exploration, acquisition, development, and operation of gold bearing properties. Currently there are 5 analysts that rate Kinross Gold a buy, 1 analyst rates it a sell, and 11 rate it a hold.

The average volume for Kinross Gold has been 10.9 million shares per day over the past 30 days. Kinross has a market cap of $2.8 billion and is part of the basic materials sector and metals & mining industry. Shares are down 50.9% 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 Kinross Gold as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • KGC'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 53.29%, 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.
  • KGC, with its decline in revenue, slightly underperformed the industry average of 0.2%. Since the same quarter one year prior, revenues slightly dropped by 5.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • KINROSS GOLD CORP 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, KINROSS GOLD CORP reported poor results of -$2.64 versus -$2.23 in the prior year. This year, the market expects an improvement in earnings ($0.12 versus -$2.64).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, KINROSS GOLD CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • 40.65% is the gross profit margin for KINROSS GOLD CORP which we consider to be strong. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, KGC's net profit margin of 4.83% 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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