Trade-Ideas: Randgold Resources (GOLD) Is Today's

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

  • GOLD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $56.2 million.
  • GOLD has traded 71,886 shares today.
  • GOLD is up 4.1% today.
  • GOLD was down 5% yesterday.

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More details on GOLD:

Randgold Resources Limited explores and develops gold deposits in Sub-Saharan Africa. The stock currently has a dividend yield of 0.7%. GOLD has a PE ratio of 22.9. Currently there are 6 analysts that rate Randgold Resources a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Randgold Resources has been 1.1 million shares per day over the past 30 days. Randgold has a market cap of $6.1 billion and is part of the basic materials sector and metals & mining industry. Shares are up 2.6% 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 Randgold Resources as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • GOLD's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GOLD has a quick ratio of 1.70, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 44.28% is the gross profit margin for RANDGOLD RESOURCES LTD which we consider to be strong. Regardless of GOLD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GOLD's net profit margin of 20.48% compares favorably to the industry average.
  • GOLD, with its decline in revenue, underperformed when compared the industry average of 3.5%. Since the same quarter one year prior, revenues fell by 14.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • RANDGOLD RESOURCES LTD's earnings per share declined by 28.7% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, RANDGOLD RESOURCES LTD reported lower earnings of $2.99 versus $4.65 in the prior year. For the next year, the market is expecting a contraction of 7.5% in earnings ($2.77 versus $2.99).
  • 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 28.7% when compared to the same quarter one year ago, falling from $81.34 million to $58.01 million.

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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