Trade-Ideas: Agnico Eagle Mines (AEM) 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.

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

  • AEM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $75.3 million.
  • AEM has traded 166,476 shares today.
  • AEM is up 3.5% today.
  • AEM was down 5% yesterday.

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More details on AEM:

Agnico Eagle Mines Limited engages in the exploration, development, and production of mineral properties. It primarily explores for gold, as well as for silver, copper, zinc, and lead. The stock currently has a dividend yield of 1%. AEM has a PE ratio of 82.2. Currently there are 10 analysts that rate Agnico Eagle Mines a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Agnico Eagle Mines has been 2.2 million shares per day over the past 30 days. Agnico Eagle Mines has a market cap of $6.9 billion and is part of the basic materials sector and metals & mining industry. Shares are up 28.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Agnico Eagle Mines as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 18.8%. Since the same quarter one year prior, revenues rose by 15.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.23, which illustrates the ability to avoid short-term cash problems.
  • 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, AGNICO EAGLE MINES LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The gross profit margin for AGNICO EAGLE MINES LTD is currently lower than what is desirable, coming in at 34.85%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, AEM's net profit margin of -4.23% significantly underperformed when compared to the industry average.

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