Trade-Ideas LLC identified

Carpenter Technology

(

CRS

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Carpenter Technology as such a stock due to the following factors:

  • CRS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.9 million.
  • CRS has traded 87,554 shares today.
  • CRS is trading at 5.76 times the normal volume for the stock at this time of day.
  • CRS is trading at a new low 8.05% 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 CRS:

Carpenter Technology Corporation manufactures, fabricates, and distributes specialty metals worldwide. It operates through two segments: Specialty Alloys Operations and Performance Engineered Products. The stock currently has a dividend yield of 2%. CRS has a PE ratio of 44. Currently there is 1 analyst that rates Carpenter Technology a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Carpenter Technology has been 629,600 shares per day over the past 30 days. Carpenter Technology has a market cap of $1.7 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.95 and a short float of 9.8% with 9.83 days to cover. Shares are up 17.8% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Carpenter Technology as a

hold

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • Net operating cash flow has significantly increased by 140.80% to $30.10 million when compared to the same quarter last year. In addition, CARPENTER TECHNOLOGY CORP has also vastly surpassed the industry average cash flow growth rate of -11.13%.
  • The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.86 is somewhat weak and could be cause for future problems.
  • Despite the weak revenue results, CRS has outperformed against the industry average of 38.8%. Since the same quarter one year prior, revenues fell by 19.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, CARPENTER TECHNOLOGY CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The gross profit margin for CARPENTER TECHNOLOGY CORP is rather low; currently it is at 21.79%. Regardless of CRS's low profit margin, it has managed to increase from the same period last year.

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