Tumbling to a price of $14.99 during today's morning trading session, shares of Gold Fields are now -10.48% below their average target price of $16.75. Does this mean the stock will reverse course? Analysts are giving GFI an average rating of buy and target prices ranging from 14.0 to 18.0 dollars per share.
The market seems to share this optimistic view, since Gold Fields has a short interest of only 1.1% (this is the percentage of the share float that is being shorted). Each short position represents an investor's expectation that the price of the stock will decrease in the future.
When a stock is sold short, it means an investor has borrowed shares of the stock from their broker, and then sold them at the going market price. The investor hopes for the price to decline, so that they might buy those shares back at a lower price in the future. Once they do, they can return the borrowed shares to their broker, and keep the profit they made on the transaction.
We can make inferences about the market sentiment surrounding Gold Fields by analyzing its rate of institutional ownership. If institutions such as hedge funds and pension funds are the primary shareholders of a corporation, it most likely means that its shares are a good investment according to those institutions' analysts.
At 22.0%, the rate of institutional ownership is average, indicating that a sufficient number of institutions have concluded that it is a stable investment. Beware, however, that the rate of institutional ownership could also indicate an ongoing proxy battle or takeover attempt -- so you should also periodically check the news about a stock whose institutional ownership you are tracking.
Overall, there is mixed market sentiment towards Gold Fields because of an analyst consensus of some upside potential, a buy rating, a very low short interest, and only a small number of institutional investors. Investors should not base their decisions on market sentiment only, they should also be aware of a stock's fundamentals before committing.
At a glance, here are some essential statistics you may want to know about GFI:
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It has trailing 12 month earnings per share (EPS) of $0.71 per share
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Gold Fields has a trailing 12 month Price to Earnings (P/E) ratio of 21.1 while the S&P 500 average is 29.3
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The company has a Price to Book (P/B) ratio of 2.88 in contrast to the S&P 500's average ratio of 4.74
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Gold Fields is a Basic Materials company, and the sector average P/E and P/B ratios are 24.53 and 2.64 respectively
