Pan American Silver (PAAS) Stock Gains on Heavy Trading Volume

NEW YORK (TheStreet) -- Shares of Pan American Silver (PAAS) were gaining 6.6% to $9.56 on heavy trading volume Monday afternoon as silver prices were rising.

U.S. silver futures for July delivery were up 1.7% to $16.10 an ounce on the Comex on Monday afternoon.

Prices of the precious metal and gold were rising slightly Monday as Greece debt talks with creditors stalled, according to Reuters. The stronger dollar also helped contribute to the slight uptick in prices ahead of the Federal Reserve's policy meeting on Tuesday and Wednesday.

About 3.2 million shares of Pan American Silver were traded by 2:06 p.m. Monday, above the company's average trading volume of about 1.7 million shares a day.

Pan American Silver is a mining company based in Vancouver, Canada. The company operates mines in the U.S., Mexico, Peru, Bolivia, and Argentina.

TheStreet Ratings team rates PAN AMERICAN SILVER CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate PAN AMERICAN SILVER CORP (PAAS) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. 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 analysis by TheStreet Ratings Team goes as follows:

  • 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.
  • You can view the full analysis from the report here: PAAS Ratings Report

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