Stock To Watch: Gold Fields (GFI) 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 Gold Fields ( GFI) as a "perilous reversal" (up big yesterday but down 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 $27.0 million.
  • GFI has traded 61,017 shares today.
  • GFI is down 3.6% today.
  • GFI was up 9.3% 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 0.7%. GFI has a PE ratio of 5.1. 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 5.8 million shares per day over the past 30 days. Gold Fields has a market cap of $3.5 billion and is part of the basic materials sector and metals & mining industry. Shares are up 28.1% 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 Gold Fields as a sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

Highlights from the ratings report include:
  • 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 underperformed against that of the industry average and is significantly less than 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 ($0.11 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.
  • Net operating cash flow has significantly increased by 617.13% to $220.30 million when compared to the same quarter last year. In addition, GOLD FIELDS LTD has also vastly surpassed the industry average cash flow growth rate of -55.16%.

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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