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

  • PAAS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.4 million.
  • PAAS has traded 661,591 shares today.
  • PAAS is trading at 6.99 times the normal volume for the stock at this time of day.
  • PAAS is trading at a new high 4.01% 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 PAAS:

Pan American Silver Corp., together with its subsidiaries, operates and develops, and explores for silver producing properties and assets in Mexico, Peru, Argentina, and Bolivia. The company also produces and sells gold, zinc, lead, and copper. The stock currently has a dividend yield of 2.2%. Currently there are no analysts that rate Pan American Silver a buy, 2 analysts rate it a sell, and 6 rate it a hold.

The average volume for Pan American Silver has been 1.7 million shares per day over the past 30 days. Pan American has a market cap of $1.4 billion and is part of the basic materials sector and metals & mining industry. Shares are down 2.5% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Pan American Silver as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

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 383.0% when compared to the same quarter one year ago, falling from $6.84 million to -$19.37 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, PAN AMERICAN SILVER CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for PAN AMERICAN SILVER CORP is rather low; currently it is at 24.22%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -10.87% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $11.95 million or 66.93% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 31.78%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 360.00% compared to the year-earlier 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.

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