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

Sociedad Quimica Y Minera De Chile

(

SQM

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Sociedad Quimica Y Minera De Chile as such a stock due to the following factors:

• SQM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.1 million.

• SQM has traded 344,639 shares today.

• SQM is trading at 24.12 times the normal volume for the stock at this time of day.

• SQM is trading at a new low 15.07% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 SQM:

Chemical and Mining Company of Chile Inc. is engaged in the production and distribution of specialty plant nutrients, iodine and its derivatives, lithium and its derivatives, potassium chloride and potassium sulfate, industrial chemicals, and other commodity fertilizers. The stock currently has a dividend yield of 5%. SQM has a PE ratio of 12.7. Currently there is 1 analyst that rates Sociedad Quimica Y Minera De Chile a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Sociedad Quimica Y Minera De Chile has been 369,600 shares per day over the past 30 days. Sociedad Quimica Y Minera De Chile has a market cap of $5.9 billion and is part of the basic materials sector and chemicals industry. Shares are down 7.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Sociedad Quimica Y Minera De Chile as a

hold

. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

• The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Chemicals industry average. The net income increased by 13.1% when compared to the same quarter one year prior, going from $68.97 million to $78.00 million.
• The debt-to-equity ratio is somewhat low, currently at 0.80, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 2.87, which clearly demonstrates the ability to cover short-term cash needs.
• SOC QUIMICA Y MINERA DE CHI has improved earnings per share by 15.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SOC QUIMICA Y MINERA DE CHI reported lower earnings of $1.13 versus $1.78 in the prior year. This year, the market expects an improvement in earnings ($1.32 versus $1.13).
• SQM'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 25.14%, 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.
• Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Chemicals industry and the overall market, SOC QUIMICA Y MINERA DE CHI's return on equity is significantly below that of the industry average and is below that of the S&P 500.

• You can view the full Sociedad Quimica Y Minera De Chile Ratings Report.

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