Today's Dead Cat Bounce Stock: Gold Fields (GFI)

Trade-Ideas LLC identified Gold Fields ( GFI) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Gold Fields as such a stock due to the following factors:

  • GFI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $35.3 million.
  • GFI has traded 313,378 shares today.
  • GFI is up 3.4% today.
  • GFI was down 5.3% yesterday.

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More details on GFI:

Gold Fields Limited produces gold and holds gold reserves in South Africa, Ghana, Australia, and Peru. It engages in underground and surface gold and surface copper mining and related activities, including exploration, extraction, processing, and smelting. The stock currently has a dividend yield of 0.2%. Currently there are no analysts that rate Gold Fields a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Gold Fields has been 6.5 million shares per day over the past 30 days. Gold Fields has a market cap of $4.6 billion and is part of the basic materials sector and metals & mining industry. Shares are up 112.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Gold Fields as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and feeble growth in its earnings per share.

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 911.4% when compared to the same quarter one year ago, falling from -$25.50 million to -$257.90 million.
  • 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 on the basis of return on equity, GOLD FIELDS LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for GOLD FIELDS LTD is currently lower than what is desirable, coming in at 32.89%. It has decreased from the same quarter the previous year.
  • Net operating cash flow has declined marginally to $181.90 million or 1.56% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • GOLD FIELDS LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, GOLD FIELDS LTD swung to a loss, reporting -$0.31 versus $0.02 in the prior year. This year, the market expects an improvement in earnings ($0.25 versus -$0.31).

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