Strong On High Relative Volume: Iamgold (IAG)

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 Iamgold ( IAG) as a strong on high relative volume 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 $9.6 million.
  • IAG has traded 561,333 shares today.
  • IAG is trading at 3.10 times the normal volume for the stock at this time of day.
  • IAG is trading at a new high 3.12% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 IAG:

IAMGOLD Corporation primarily engages in the exploration, development, and operation of gold mining properties. It also explores for silver and copper deposits. Currently there is 1 analyst that rates Iamgold a buy, 3 analysts rate it a sell, and 3 rate it a hold.

The average volume for Iamgold has been 5.9 million shares per day over the past 30 days. Iamgold has a market cap of $844.3 million and is part of the basic materials sector and metals & mining industry. Shares are down 17% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Iamgold as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The gross profit margin for IAMGOLD CORP is currently extremely low, coming in at 12.11%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, IAG's net profit margin of -44.77% significantly underperformed when compared to the industry average.
  • IAG's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 35.82%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
  • 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, IAMGOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • IAG's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.76 is somewhat weak and could be cause for future problems.
  • IAMGOLD CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, IAMGOLD CORP continued to lose money by earning -$0.72 versus -$2.29 in the prior year.

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