Should Gold Fields Limited (GFI) be Part of a Diversified Investment?

Analysts at HSBC Securities upped their rating on shares of Gold Fields Limited (NYSE:GFI) from Hold to Buy in their opinion released on August 17. BofA/Merrill analysts bumped their recommendation on GFI stock from Underperform to Buy in a separate flash note to investors on April 13. Analysts at Morgan Stanley issued an upgrade from Underweight to Equal-Weight for the stock, in a research note that dated back to March 20.

By watching the trading activity of corporate insiders, it will become easier to get a sense of Gold Fields Limited (NYSE:GFI)’s prospects.

Gold Fields Limited (GFI) is expected to jump by -8.67 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $7.63-month high price target. This represents a whopping 106.78 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $3.13, which represents a return potential of -15.18 percent when compared to the closing price of the stock of $3.69 on Friday, January 11. The lowest price target for the stock is $2.41 — slightly more than -34.69 percent from GFI’s current share price.

The shares are currently floating around the first support level of $3.62. Below this, the next support is placed in the zone of $3.55. Till the time, the GFI stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 64.3 on daily chart, which may remain a cause for concern. If the price breaks below $3.55 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $3.75 mark may result into a pull-back move towards $3.81 level.

GFI shares accumulated 0.08 points or 2.22 percent on Friday to $3.69 with a heavy trade volume of 5.159 million shares. After opening the session at $3.64, the shares went as high as $3.745 and as low as $3.615, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $3 billion and now has 812.17 million shares outstanding. Gold Fields Limited (GFI) stock has gained 18.65 percent of market value in 21 trading days.

GFI stock has a trailing 3-year beta of -1.24, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$0.55 a share in the trailing twelve months. The stock’s value has surged 4.83 percent year to date (YTD) against a decline of -11.51 percent in 12 month’s time. The company’s shares still trade -18.72 percent away from its 1-year high of $4.54 and 67.67 percent up from 52-week low of $2.20. The average consensus rating on the company is 2.4, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of Gold Fields Limited (GFI) are trading at a P/E ratio of 0 times earnings reported for the past 12 months. The industry GFI operates in has an average P/E of 15.81. Its P/E ratio went as low as 15.53X and as high as 273.22 over the 5-year span. Further, it is sporting a 1.07 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1. 23.8 percent is the gross profit margin for Gold Fields Limited and operating margin sits at -5 percent. Along with this, the net profit margin is -15.6 percent.