Trade-Ideas: Gold Fields (GFI) 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 Gold Fields ( GFI) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Gold Fields as such a stock due to the following factors:

  • GFI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.6 million.
  • GFI has traded 428,147 shares today.
  • GFI is down 3.1% today.
  • GFI was up 6.9% yesterday.

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More details on GFI:

Gold Fields Limited operates as a gold mining company. The company engages in the exploration, extraction, processing, and smelting of gold and copper properties. It holds interests in eight operating mines in South Africa, Ghana, Australia, and Peru. The stock currently has a dividend yield of 0.9%. GFI has a PE ratio of 4. Currently there is 1 analyst that rates Gold Fields a buy, 2 analysts rate it a sell, and 2 rate it a hold.

The average volume for Gold Fields has been 4.1 million shares per day over the past 30 days. Gold Fields has a market cap of $2.6 billion and is part of the basic materials sector and metals & mining industry. Shares are down 26.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Gold Fields as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 4533.3% when compared to the same quarter one year ago, falling from -$0.30 million to -$13.90 million.
  • The gross profit margin for GOLD FIELDS LTD is currently lower than what is desirable, coming in at 33.77%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.27% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $150.20 million or 24.10% when compared to the same quarter last year. Despite a decrease in cash flow GOLD FIELDS LTD is still fairing well by exceeding its industry average cash flow growth rate of -35.64%.
  • 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, GOLD FIELDS LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Despite currently having a low debt-to-equity ratio of 0.56, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.

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