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Trade-Ideas: ArcelorMittal (MT) Is Today's Post-Market Laggard Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified ArcelorMittal ( MT) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified ArcelorMittal as such a stock due to the following factors:

  • MT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $60.7 million.
  • MT is down 4% today from today's close.

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More details on MT:

ArcelorMittal, Societe Anonyme, together with its subsidiaries, operates as an integrated steel and mining company worldwide. The company operates in six segments: Flat Carbon Americas; Flat Carbon Europe; Long Carbon Americas and Europe; AACIS; Distribution Solutions; and Mining. The stock currently has a dividend yield of 1.1%. Currently there are 4 analysts that rate ArcelorMittal a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for ArcelorMittal has been 4.9 million shares per day over the past 30 days. ArcelorMittal has a market cap of $26.9 billion and is part of the basic materials sector and metals & mining industry. Shares are down 9.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates ArcelorMittal as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and revenue growth. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.5%. Since the same quarter one year prior, revenues slightly increased by 2.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 72.06% and other important driving factors, this stock has surged by 31.97% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.45 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Net operating cash flow has decreased to $2,687.00 million or 19.23% when compared to the same quarter last year. Despite a decrease in cash flow ARCELORMITTAL SA is still fairing well by exceeding its industry average cash flow growth rate of -49.83%.
  • The gross profit margin for ARCELORMITTAL SA is currently extremely low, coming in at 8.30%. Regardless of MT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, MT's net profit margin of -6.18% significantly underperformed when compared to the industry average.

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