Weak On High Volume: Nucor (NUE)
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 weak on high relative volume 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 $107.9 million.
- NUE has traded 441,113 shares today.
- NUE is trading at 5.05 times the normal volume for the stock at this time of day.
- NUE is trading at a new low 5.01% 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 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 21.4. Currently there are 7 analysts that rate Nucor a buy, no analysts rate it a sell, and 6 rate it a hold.
The average volume for Nucor has been 2.4 million shares per day over the past 30 days. Nucor has a market cap of $15.1 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.35 and a short float of 3% with 3.69 days to cover. Shares are up 0.5% 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 revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 18.9%. Since the same quarter one year prior, revenues slightly increased by 2.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- NUCOR CORP has improved earnings per share by 22.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, NUCOR CORP increased its bottom line by earning $2.22 versus $1.52 in the prior year. This year, the market expects an improvement in earnings ($2.58 versus $2.22).
- 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 23.4% when compared to the same quarter one year prior, going from $170.49 million to $210.43 million.
- Net operating cash flow has significantly increased by 114.77% to $417.34 million when compared to the same quarter last year. In addition, NUCOR CORP has also vastly surpassed the industry average cash flow growth rate of -47.05%.
- Despite currently having a low debt-to-equity ratio of 0.59, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that NUE's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.55 is high and demonstrates strong liquidity.
- You can view the full Nucor Ratings Report.
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