Trade-Ideas LLC identified

Commercial Metals

(

CMC

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

  • CMC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.3 million.
  • CMC has traded 420,411 shares today.
  • CMC is trading at 8.16 times the normal volume for the stock at this time of day.
  • CMC is trading at a new low 12.00% 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 CMC:

TheStreet Recommends

Commercial Metals Company manufactures, recycles, and markets steel and metal products, and related materials and services in the United States and internationally. The stock currently has a dividend yield of 2.9%. CMC has a PE ratio of 1. Currently there are 2 analysts that rate Commercial Metals a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Commercial Metals has been 1.1 million shares per day over the past 30 days. Commercial has a market cap of $1.9 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.13 and a short float of 5.5% with 4.57 days to cover. Shares are up 0.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Commercial Metals as a

buy

. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • COMMERCIAL METALS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, COMMERCIAL METALS increased its bottom line by earning $0.90 versus $0.64 in the prior year. This year, the market expects an improvement in earnings ($1.84 versus $0.90).
  • 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 140.6% when compared to the same quarter one year prior, rising from $23.56 million to $56.68 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Metals & Mining industry and the overall market, COMMERCIAL METALS's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • Net operating cash flow has significantly increased by 241.96% to $198.07 million when compared to the same quarter last year. In addition, COMMERCIAL METALS has also vastly surpassed the industry average cash flow growth rate of -54.64%.

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