Weak On High Volume: Kinross Gold (KGC)

Trade-Ideas LLC identified Kinross Gold ( KGC) as a weak on high relative volume 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 $71.8 million.
  • KGC has traded 2.0 million shares today.
  • KGC is trading at 2.43 times the normal volume for the stock at this time of day.
  • KGC is trading at a new low 5.06% 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 KGC:

Kinross Gold Corporation, together with its subsidiaries, engages in the acquisition, exploration, development, and production of gold properties. Currently there are 6 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 $6.3 billion and is part of the basic materials sector and metals & mining industry. Shares are up 184.1% year-to-date as of the close of trading on Friday.

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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 the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 47.9%. Since the same quarter one year prior, revenues rose by 16.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.46, 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 1.42, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 88.93% to $315.90 million when compared to the same quarter last year. In addition, KINROSS GOLD CORP has also vastly surpassed the industry average cash flow growth rate of -39.56%.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. 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.

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