Watch For Today's Momo Momentum Stock: Nucor (NUE)
Trade-Ideas LLC identified
(
) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Nucor as such a stock due to the following factors:
- NUE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $171.1 million.
- NUE has a PE ratio of 44.
- NUE is currently in the upper 30% of its 1-year range.
- NUE is in the upper 25% of its 20-day range.
- NUE is in the upper 35% of its 5-day range.
- NUE is currently trading above yesterday's high.
- NUE has experienced a gap between today's open and yesterday's close of 1%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.
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More details on NUE:
Nucor Corporation manufactures and sells steel and steel products in the United States and internationally. It operates through three segments: Steel Mills, Steel Products, and Raw Materials. The stock currently has a dividend yield of 3.1%. NUE has a PE ratio of 44. Currently there are 7 analysts that rate Nucor a buy, 1 analyst rates it a sell, and 4 rate it a hold.
The average volume for Nucor has been 2.6 million shares per day over the past 30 days. Nucor has a market cap of $15.9 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.49 and a short float of 2.7% with 2.57 days to cover. Shares are up 26.8% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Nucor as a
. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- 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 Metals & Mining industry average. The net income increased by 4.3% when compared to the same quarter one year prior, going from $67.80 million to $70.75 million.
- The current debt-to-equity ratio, 0.59, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, NUE has a quick ratio of 2.47, which demonstrates the ability of the company to cover short-term liquidity needs.
- Despite the weak revenue results, NUE has significantly outperformed against the industry average of 45.6%. Since the same quarter one year prior, revenues fell by 15.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- NUCOR CORP's earnings per share improvement from the most recent quarter was slightly positive. 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, NUCOR CORP reported lower earnings of $1.12 versus $2.22 in the prior year. This year, the market expects an improvement in earnings ($2.50 versus $1.12).
- You can view the full Nucor Ratings Report.
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