Trade-Ideas: ArcelorMittal (MT) Is Today's Post-Market Leader Stock
Trade-Ideas LLC identified
(
) as a post-market leader 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 $81.5 million.
- MT is up 2.8% today from today's close.
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More details on MT:
ArcelorMittal, together with its subsidiaries, operates as an integrated steel and mining company worldwide. The company operates through five segments: NAFTA; Brazil; Europe; Africa & Commonwealth of Independent States; and Mining. It produces finished and semi-finished steel products. Currently there are 3 analysts that rate ArcelorMittal a buy, 1 analyst rates it a sell, and 3 rate it a hold.
The average volume for ArcelorMittal has been 17.5 million shares per day over the past 30 days. ArcelorMittal has a market cap of $11.4 billion and is part of the basic materials sector and metals & mining industry. Shares are up 18.2% year-to-date as of the close of trading on Friday.
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Analysis:
rates ArcelorMittal as a
. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and generally high debt management risk.
Highlights from the ratings report include:
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, ARCELORMITTAL SA's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for ARCELORMITTAL SA is currently extremely low, coming in at 6.92%. It has decreased from the same quarter the previous year.
- MT's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 31.48%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
- MT's debt-to-equity ratio of 0.79 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.33 is very low and demonstrates very weak liquidity.
- Despite the weak revenue results, MT has outperformed against the industry average of 45.8%. Since the same quarter one year prior, revenues fell by 21.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full ArcelorMittal Ratings Report.
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