ArcelorMittal (MT) Weak On High Volume
Trade-Ideas LLC identified
(
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified ArcelorMittal as such a stock due to the following factors:
- MT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $83.3 million.
- MT has traded 4.5 million shares today.
- MT is trading at 3.94 times the normal volume for the stock at this time of day.
- MT is trading at a new low 8.08% 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 MT:
ArcelorMittal, together with its subsidiaries, operates as an integrated steel and mining company worldwide. The company operates through five segments: NAFTA; Brazil; Europe; Africa & Commonwealth of Independent States; and Mining. It produces finished and semi-finished steel products. Currently there are 3 analysts that rate ArcelorMittal a buy, 1 analyst rates it a sell, and 3 rate it a hold.
The average volume for ArcelorMittal has been 16.0 million shares per day over the past 30 days. ArcelorMittal has a market cap of $13.0 billion and is part of the basic materials sector and metals & mining industry. Shares are up 24.6% year-to-date as of the close of trading on Friday.
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Analysis:
rates ArcelorMittal as a
. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 600.1% when compared to the same quarter one year ago, falling from -$955.00 million to -$6,686.00 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, ARCELORMITTAL SA's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $1,574.00 million or 31.32% when compared to the same quarter last year. Despite a decrease in cash flow of 31.32%, ARCELORMITTAL SA is in line with the industry average cash flow growth rate of -40.05%.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 34.93%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 601.88% compared to the year-earlier 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.
- ARCELORMITTAL SA has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ARCELORMITTAL SA reported poor results of -$4.43 versus -$0.61 in the prior year. This year, the market expects an improvement in earnings (-$0.13 versus -$4.43).
- You can view the full ArcelorMittal Ratings Report.
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