Harmony Gold Mining (HMY) Weak 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 Harmony Gold Mining ( HMY) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Harmony Gold Mining as such a stock due to the following factors:

  • HMY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.3 million.
  • HMY has traded 603,916 shares today.
  • HMY is trading at 3.89 times the normal volume for the stock at this time of day.
  • HMY is trading at a new low 5.67% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 HMY:

Harmony Gold Mining Company Limited is engaged in the exploration and mining of gold in South Africa and Papua New Guinea. The company also explores for silver, copper, and molybdenum. Currently there is 1 analyst that rates Harmony Gold Mining a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for Harmony Gold Mining has been 2.2 million shares per day over the past 30 days. Harmony has a market cap of $601.4 million and is part of the basic materials sector and metals & mining industry. Shares are down 25.4% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Harmony Gold Mining as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, 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 665.1% when compared to the same quarter one year ago, falling from $2.98 million to -$16.81 million.
  • The gross profit margin for HARMONY GOLD MINING CO LTD is rather low; currently it is at 16.82%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -6.78% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $27.21 million or 61.62% 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 52.74%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 500.00% 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.
  • 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, HARMONY GOLD MINING CO LTD's return on equity significantly trails that of both the industry average and the S&P 500.

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