Trade-Ideas LLC identified

AK Steel

(

AKS

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified AK Steel as such a stock due to the following factors:

  • AKS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $108.3 million.
  • AKS has traded 811,962 shares today.
  • AKS is down 3.6% today.
  • AKS was up 8.4% yesterday.

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More details on AKS:

AK Steel Holding Corporation, through its subsidiary, AK Steel Corporation, produces flat-rolled carbon, stainless and electrical steel, and tubular products in the United States and internationally. Currently there are 2 analysts that rate AK Steel a buy, 4 analysts rate it a sell, and 7 rate it a hold.

The average volume for AK Steel has been 13.0 million shares per day over the past 30 days. AK has a market cap of $1.1 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 2.93 and a short float of 22.6% with 2.82 days to cover. Shares are up 199.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates AK Steel as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:

  • Powered by its strong earnings growth of 122.22% and other important driving factors, this stock has surged by 144.26% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 127.0% when compared to the same quarter one year prior, rising from -$64.00 million to $17.30 million.
  • AK STEEL HOLDING CORP reported significant earnings per share improvement 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, AK STEEL HOLDING CORP reported poor results of -$2.86 versus -$0.74 in the prior year. This year, the market expects an improvement in earnings ($0.23 versus -$2.86).
  • Despite the weak revenue results, AKS has significantly outperformed against the industry average of 45.8%. Since the same quarter one year prior, revenues fell by 11.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for AK STEEL HOLDING CORP is currently extremely low, coming in at 12.00%. Regardless of AKS's low profit margin, it has managed to increase from the same period last year.

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