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

  • RGLD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $30.9 million.
  • RGLD has traded 257,222 shares today.
  • RGLD is trading at 8.70 times the normal volume for the stock at this time of day.
  • RGLD is trading at a new low 7.03% 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 RGLD:

Royal Gold, Inc., together with its subsidiaries, acquires and manages precious metals royalties, metal streams, and similar interests. It focuses on acquiring royalty and stream interests or to finance projects that are in production or in development stage in exchange for royalty interests. The stock currently has a dividend yield of 1.9%. RGLD has a PE ratio of 58. Currently there are 8 analysts that rate Royal Gold a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Royal Gold has been 824,200 shares per day over the past 30 days. Royal has a market cap of $3.1 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 0.31 and a short float of 5.5% with 4.39 days to cover. Shares are down 25.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Royal Gold as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 46.1%. Since the same quarter one year prior, revenues slightly increased by 4.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • RGLD's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 31.51, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for ROYAL GOLD INC is currently very high, coming in at 84.93%. Regardless of RGLD's high profit margin, it has managed to decrease from the same period last year.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, ROYAL GOLD INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, RGLD has underperformed the S&P 500 Index, declining 23.41% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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