Harmony Gold Mining (HMY) In A Perilous Reversal

Trade-Ideas LLC identified Harmony Gold Mining ( HMY) as a "perilous reversal" (up big yesterday but down big today) 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 $14.9 million.
  • HMY has traded 344,735 shares today.
  • HMY is down 3.4% today.
  • HMY was up 12.9% yesterday.

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More details on HMY:

Harmony Gold Mining Company Limited engages in the exploration and mining of gold in South Africa and Papua New Guinea. The company also explores for copper, silver, uranium, and molybdenum deposits. Currently there are no analysts that rate Harmony Gold Mining a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Harmony Gold Mining has been 5.8 million shares per day over the past 30 days. Harmony has a market cap of $1.4 billion and is part of the basic materials sector and metals & mining industry. Shares are up 276.8% year-to-date as of the close of trading on Friday.

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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 disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. 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.
  • The gross profit margin for HARMONY GOLD MINING CO LTD is currently lower than what is desirable, coming in at 27.15%. Despite the low profit margin, it has increased significantly from the same period last year.
  • Despite the weak revenue results, HMY has outperformed against the industry average of 44.9%. Since the same quarter one year prior, revenues fell by 16.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • HMY's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.80 is somewhat weak and could be cause for future problems.
  • HARMONY GOLD MINING CO LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HARMONY GOLD MINING CO LTD reported poor results of -$0.86 versus -$0.28 in the prior year. This year, the market expects an improvement in earnings ($0.11 versus -$0.86).

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