Strong On High Relative Volume: Sandstorm Gold (SAND)

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 Sandstorm Gold ( SAND) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Sandstorm Gold as such a stock due to the following factors:

  • SAND has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.6 million.
  • SAND has traded 197,873 shares today.
  • SAND is trading at 6.12 times the normal volume for the stock at this time of day.
  • SAND is trading at a new high 5.13% 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 SAND:

Sandstorm Gold Ltd., a resource-based company, focuses on acquiring gold and other precious metal purchase agreements and royalties from companies that have advanced stage development projects or operating mines. SAND has a PE ratio of 42. Currently there is 1 analyst that rates Sandstorm Gold a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Sandstorm Gold has been 744,100 shares per day over the past 30 days. Sandstorm has a market cap of $396.9 million and is part of the basic materials sector and metals & mining industry. Shares are down 1.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sandstorm Gold as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • SAND'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 42.36%, 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. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • SAND, with its decline in revenue, slightly underperformed the industry average of 18.2%. Since the same quarter one year prior, revenues fell by 20.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 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, SANDSTORM GOLD LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • SANDSTORM GOLD LTD 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, SANDSTORM GOLD LTD turned its bottom line around by earning $0.10 versus -$0.79 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 106.5% when compared to the same quarter one year prior, rising from -$39.86 million to $2.61 million.

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