Trade-Ideas LLC identified

Cosan

(

CZZ

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

  • CZZ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.8 million.
  • CZZ has traded 78,327 shares today.
  • CZZ is trading at 2.18 times the normal volume for the stock at this time of day.
  • CZZ is trading at a new low 3.11% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in CZZ with the Ticky from Trade-Ideas. See the FREE profile for CZZ NOW at Trade-Ideas

More details on CZZ:

Cosan Limited, together with its subsidiaries, engages in sugar and ethanol, fuel, logistics services, lubricants, and piped natural gas businesses primarily in Brazil, rest of South America, Europe, the Middle East, Asia, and North America. The stock currently has a dividend yield of 2.9%. CZZ has a PE ratio of 3. Currently there is 1 analyst that rates Cosan a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Cosan has been 1.4 million shares per day over the past 30 days. Cosan has a market cap of $649.9 million and is part of the utilities sector and utilities industry. The stock has a beta of 2.80 and a short float of 1.5% with 2.15 days to cover. Shares are down 50.2% year-to-date as of the close of trading on Wednesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Cosan as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, generally high debt management risk and disappointing return on equity.

Highlights from the ratings report include:

  • CZZ'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 56.07%, 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. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • The debt-to-equity ratio is very high at 3.13 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, CZZ maintains a poor quick ratio of 0.81, which illustrates the inability to avoid short-term cash problems.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, COSAN LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • COSAN LTD 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, COSAN LTD reported lower earnings of $0.10 versus $0.61 in the prior year. This year, the market expects an improvement in earnings ($0.90 versus $0.10).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 145.8% when compared to the same quarter one year prior, rising from $19.07 million to $46.86 million.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.