Harmony Gold Mining (HMY): Today's Weak On High Volume Stock

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 $22.5 million.
  • HMY has traded 1.1 million shares today.
  • HMY is trading at 2.55 times the normal volume for the stock at this time of day.
  • HMY is trading at a new low 6.00% 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 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 is 1 analyst that rates 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 5.3 million shares per day over the past 30 days. Harmony has a market cap of $2.0 billion and is part of the basic materials sector and metals & mining industry. Shares are up 384.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Harmony Gold Mining as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 111.76% and other important driving factors, this stock has surged by 275.00% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 112.1% when compared to the same quarter one year prior, rising from -$73.68 million to $8.94 million.
  • 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.
  • 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.
  • 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.

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