AK Steel (AKS) Showing Signs Of A Dead Cat Bounce Today
Trade-Ideas LLC identified
(
) as a "dead cat bounce" (down big yesterday but up 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 $48.5 million.
- AKS has traded 3.0 million shares today.
- AKS is up 3.2% today.
- AKS was down 5.8% 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 12.8 million shares per day over the past 30 days. AK has a market cap of $643.9 million and is part of the basic materials sector and metals & mining industry. The stock has a beta of 3.01 and a short float of 23.6% with 3.00 days to cover. Shares are up 51.8% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates AK Steel as a
. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, good cash flow from operations and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.
Highlights from the ratings report include:
- 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 95.5% when compared to the same quarter one year prior, rising from -$306.30 million to -$13.60 million.
- Net operating cash flow has significantly increased by 5162.96% to $136.70 million when compared to the same quarter last year. In addition, AK STEEL HOLDING CORP has also vastly surpassed the industry average cash flow growth rate of -39.58%.
- 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 (-$0.08 versus -$2.86).
- The gross profit margin for AK STEEL HOLDING CORP is currently extremely low, coming in at 10.88%. Regardless of AKS's low profit margin, it has managed to increase from the same period last year.
- AKS'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 38.00%, 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.
- You can view the full AK Steel Ratings Report.
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