AK Steel (AKS) In A Perilous Reversal
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.
Trade-Ideas LLC identified
(
) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified AK Steel as such a stock due to the following factors:
- AKS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $30.6 million.
- AKS has traded 104,414 shares today.
- AKS is down 3.3% today.
- AKS was up 7.8% yesterday.
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More details on AKS:
AK Steel Holding Corporation, through its subsidiary, AK Steel Corporation, produces flat-rolled carbon, stainless and electrical steel, and tubular products in the United States and internationally. Currently there are 3 analysts that rate AK Steel a buy, 1 analyst rates it a sell, and 7 rate it a hold.
The average volume for AK Steel has been 10.1 million shares per day over the past 30 days. AK has a market cap of $700.5 million and is part of the basic materials sector and metals & mining industry. The stock has a beta of 2.30 and a short float of 31.5% with 5.77 days to cover. Shares are down 33% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates AK Steel as a
. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Metals & Mining industry. The net income has significantly decreased by 61.6% when compared to the same quarter one year ago, falling from $35.20 million to $13.50 million.
- The gross profit margin for AK STEEL HOLDING CORP is currently extremely low, coming in at 10.07%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.67% trails that of the industry average.
- Net operating cash flow has decreased to $57.80 million or 49.07% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, AK STEEL HOLDING CORP has marginally lower results.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 35.07%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 73.07% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- AK STEEL HOLDING CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, AK STEEL HOLDING CORP reported poor results of -$0.74 versus -$0.34 in the prior year. This year, the market expects an improvement in earnings ($0.33 versus -$0.74).
- You can view the full AK Steel Ratings Report.
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