McEwen Mining (MUX) Is Weak On High Volume Today

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 McEwen Mining ( MUX) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified McEwen Mining as such a stock due to the following factors:

  • MUX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.7 million.
  • MUX has traded 468,126 shares today.
  • MUX is trading at 2.62 times the normal volume for the stock at this time of day.
  • MUX is trading at a new low 8.11% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on MUX:

McEwen Mining Inc. explores for, develops, produces, and sells precious and base metals in Argentina, Mexico, and the United States. It primarily explores for gold, silver, and copper. Currently there is 1 analyst that rates McEwen Mining a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for McEwen Mining has been 2.8 million shares per day over the past 30 days. McEwen has a market cap of $308.1 million and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.90 and a short float of 17.1% with 7.19 days to cover. Shares are down 40.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates McEwen Mining as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • 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 499.3% when compared to the same quarter one year ago, falling from $3.26 million to -$13.03 million.
  • Net operating cash flow has decreased to -$2.32 million or 43.46% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 37.30%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 500.00% 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.
  • MCEWEN MINING INC 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, MCEWEN MINING INC reported poor results of -$0.50 versus -$0.26 in the prior year. This year, the market expects an improvement in earnings (-$0.01 versus -$0.50).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, MCEWEN MINING INC underperformed against that of the industry average and is significantly less than that of the S&P 500.

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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