Trade-Ideas LLC identified Pan American Silver ( PAAS) as a "perilous reversal" (up big yesterday but down big today) 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 $23.8 million.
  • PAAS has traded 53,256 shares today.
  • PAAS is down 3.8% today.
  • PAAS was up 9.9% yesterday.

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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 2.7%. Currently there are 3 analysts that rate Pan American Silver a buy, 2 analysts rate it a sell, and 4 rate it a hold.

The average volume for Pan American Silver has been 3.0 million shares per day over the past 30 days. Pan American has a market cap of $1.1 billion and is part of the basic materials sector and metals & mining industry. Shares are down 17.5% year-to-date as of the close of trading on Tuesday.

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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 disappointing return on equity, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • 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 20.52%. It has decreased from the same quarter the previous year.
  • Net operating cash flow has significantly decreased to $20.48 million or 57.98% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Looking at the price performance of PAAS's shares over the past 12 months, there is not much good news to report: the stock is down 30.56%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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.
  • PAN AMERICAN SILVER CORP's earnings per share declined by 25.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, PAN AMERICAN SILVER CORP reported poor results of -$3.62 versus -$2.98 in the prior year. This year, the market expects an improvement in earnings (-$0.40 versus -$3.62).

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