Iamgold (IAG) Is Strong On High Volume Today

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 $7.9 million.
  • IAG has traded 705,158 shares today.
  • IAG is trading at 2.71 times the normal volume for the stock at this time of day.
  • IAG is trading at a new high 3.24% 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 4.8 million shares per day over the past 30 days. Iamgold has a market cap of $806.1 million and is part of the basic materials sector and metals & mining industry. Shares are down 20% year-to-date as of the close of trading on Monday.

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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 lower than what is desirable, coming in at 30.77%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 9.84% trails that of 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 40.76%, which is also worse than the performance of the S&P 500 Index. 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.
  • IAMGOLD CORP reported flat earnings per share in the most recent quarter. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, IAMGOLD CORP continued to lose money by earning -$0.72 versus -$2.29 in the prior year.
  • Net operating cash flow has slightly increased to $30.00 million or 6.76% when compared to the same quarter last year. Despite an increase in cash flow, IAMGOLD CORP's cash flow growth rate is still lower than the industry average growth rate of 19.72%.

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