Heavy Trading On Anglogold Ashanti (AU) Before Market Open

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 Anglogold Ashanti ( AU) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Anglogold Ashanti as such a stock due to the following factors:

  • AU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.1 million.
  • AU traded 829,242 shares today in the pre-market hours as of 8:29 AM, representing 25.9% of its average daily volume.

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More details on AU:

AngloGold Ashanti Limited operates as a gold mining and exploration company. It also produces silver, uranium oxide, copper, molybdenum, and sulphur. The company has 20 operations and exploration projects in South Africa, Continental Africa, Australasia, and the Americas. The stock currently has a dividend yield of 0.4%. Currently there are 4 analysts that rate Anglogold Ashanti a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Anglogold Ashanti has been 3.4 million shares per day over the past 30 days. Anglogold Ashanti has a market cap of $4.6 billion and is part of the basic materials sector and metals & mining industry. Shares are up 31.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Anglogold Ashanti as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The debt-to-equity ratio of 1.31 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, AU maintains a poor quick ratio of 0.73, which illustrates the inability to avoid short-term cash problems.
  • The gross profit margin for ANGLOGOLD ASHANTI LTD is currently lower than what is desirable, coming in at 34.27%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.40% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $213.00 million or 50.58% 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.
  • AU'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 37.41%, 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 on the basis of return on equity, ANGLOGOLD ASHANTI LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.

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