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 $16.2 million.
  • CRS has traded 175,474 shares today.
  • CRS is trading at 12.26 times the normal volume for the stock at this time of day.
  • CRS is trading at a new low 6.00% 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 32. Currently there are 2 analysts that rate Carpenter Technology a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Carpenter Technology has been 470,000 shares per day over the past 30 days. Carpenter Technology has a market cap of $1.8 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.84 and a short float of 6% with 5.98 days to cover. Shares are down 27.6% year-to-date as of the close of trading on Friday.

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

Highlights from the ratings report include:

  • The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.16, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $134.20 million or 40.37% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 8.69%.
  • Despite the weak revenue results, CRS has significantly outperformed against the industry average of 46.6%. Since the same quarter one year prior, revenues slightly dropped by 7.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for CARPENTER TECHNOLOGY CORP is rather low; currently it is at 21.42%. It has decreased from the same quarter the previous year.
  • The share price of CARPENTER TECHNOLOGY CORP has not done very well: it is down 16.97% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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