Stock To Watch: Iamgold (IAG) In Perilous Reversal

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 Iamgold ( IAG) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Iamgold as such a stock due to the following factors:

  • IAG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.0 million.
  • IAG has traded 62,218 shares today.
  • IAG is down 3.3% today.
  • IAG was up 21.8% yesterday.

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More details on IAG:

IAMGOLD Corporation explores, develops, and operates gold mining properties. The company also explores for silver, niobium, and copper deposits. Currently there are 4 analysts that rate Iamgold a buy, 4 analysts rate it a sell, and 1 rates it a hold.

The average volume for Iamgold has been 7.8 million shares per day over the past 30 days. Iamgold has a market cap of $719.7 million and is part of the basic materials sector and metals & mining industry. Shares are down 47.8% 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 Iamgold as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • IAMGOLD CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, IAMGOLD CORP swung to a loss, reporting -$2.21 versus $0.89 in the prior year.
  • The company, on the basis of change in net income 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 has significantly decreased by 386.6% when compared to the same quarter one year ago, falling from $25.30 million to -$72.50 million.
  • 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, IAMGOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for IAMGOLD CORP is currently lower than what is desirable, coming in at 34.55%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -21.22% is significantly below that of the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 61.59%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 371.42% compared to the year-earlier 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.

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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