Steel Dynamics (STLD) Is Strong On High Volume Today
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 strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Steel Dynamics as such a stock due to the following factors:
- STLD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $95.3 million.
- STLD has traded 530,735 shares today.
- STLD is trading at 2.23 times the normal volume for the stock at this time of day.
- STLD is trading at a new high 3.01% above yesterday's close.
'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 STLD:
Steel Dynamics, Inc., together with its subsidiaries, manufactures and sells steel products, processes and sells recycled ferrous and nonferrous metals, and fabricates and sells steel joist and decking products in the United States and internationally. The stock currently has a dividend yield of 2.7%. STLD has a PE ratio of 30.4. Currently there are 12 analysts that rate Steel Dynamics a buy, no analysts rate it a sell, and none rate it a hold.
The average volume for Steel Dynamics has been 3.9 million shares per day over the past 30 days. Steel Dynamics has a market cap of $4.9 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.68 and a short float of 1.9% with 0.54 days to cover. Shares are up 2.5% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates Steel Dynamics as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and generally higher debt management risk.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 18.7%. Since the same quarter one year prior, revenues rose by 35.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 380.68% to $319.58 million when compared to the same quarter last year. In addition, STEEL DYNAMICS INC has also vastly surpassed the industry average cash flow growth rate of -45.34%.
- The gross profit margin for STEEL DYNAMICS INC is rather low; currently it is at 15.33%. Regardless of STLD's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, STLD's net profit margin of -1.78% significantly underperformed when compared to the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 182.4% when compared to the same quarter one year ago, falling from $54.66 million to -$45.03 million.
- You can view the full Steel Dynamics Ratings Report.
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