Today's Dead Cat Bounce Stock: Kinross Gold (KGC)

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

  • KGC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $54.1 million.
  • KGC has traded 8.6 million shares today.
  • KGC is up 3.1% today.
  • KGC was down 5.6% yesterday.

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More details on KGC:

Kinross Gold Corporation, together with its subsidiaries, engages in the acquisition, exploration, development, and production of gold properties. Currently there are 5 analysts that rate Kinross Gold a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Kinross Gold has been 16.0 million shares per day over the past 30 days. Kinross has a market cap of $6.2 billion and is part of the basic materials sector and metals & mining industry. Shares are up 159.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Kinross 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 solid stock price performance. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 45.9%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.40, which illustrates the ability to avoid short-term cash problems.
  • 37.59% is the gross profit margin for KINROSS GOLD CORP which we consider to be strong. Regardless of KGC's high profit margin, it has managed to decrease from the same period last year.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Metals & Mining industry and the overall market, KINROSS GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $214.50 million or 14.23% 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.

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