Strong On High Relative Volume: Buenaventura Mining (BVN)

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

  • BVN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.8 million.
  • BVN has traded 122,027 shares today.
  • BVN is trading at 2.16 times the normal volume for the stock at this time of day.
  • BVN is trading at a new high 3.01% 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 BVN:

Compania de Minas Buenaventura S.A.A., a precious metals company, engages in the exploration, mining, and processing of gold, silver, lead, zinc, and copper metals in Peru. The stock currently has a dividend yield of 0.3%. Currently there are 2 analysts that rate Buenaventura Mining a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Buenaventura Mining has been 1.5 million shares per day over the past 30 days. Buenaventura has a market cap of $2.9 billion and is part of the basic materials sector and metals & mining industry. Shares are up 19.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Buenaventura Mining as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:
  • In its most recent trading session, BVN has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Net operating cash flow has decreased to $130.65 million or 33.62% when compared to the same quarter last year. Despite a decrease in cash flow MINAS BUENAVENTURA SA is still fairing well by exceeding its industry average cash flow growth rate of -46.77%.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, MINAS BUENAVENTURA SA underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • 35.69% is the gross profit margin for MINAS BUENAVENTURA SA which we consider to be strong. Regardless of BVN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BVN's net profit margin of -60.76% significantly underperformed when compared to the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 18.2%. Since the same quarter one year prior, revenues fell by 11.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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