CST Brands (CST) Flagged As Strong On High Volume - TheStreet

Trade-Ideas LLC identified

CST Brands

(

CST

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

  • CST has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.3 million.
  • CST has traded 80,794 shares today.
  • CST is trading at 4.45 times the normal volume for the stock at this time of day.
  • CST is trading at a new high 3.02% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 CST:

CST Brands, Inc., through its subsidiaries, operates as an independent retailer of motor fuel and convenience merchandise items in North America. The stock currently has a dividend yield of 0.7%. CST has a PE ratio of 13. Currently there are 5 analysts that rate CST Brands a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for CST Brands has been 644,500 shares per day over the past 30 days. CST has a market cap of $2.7 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.11 and a short float of 4.6% with 4.84 days to cover. Shares are down 17.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates CST Brands as a

hold

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 34.9% when compared to the same quarter one year prior, rising from $63.00 million to $85.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to other companies in the Specialty Retail industry and the overall market on the basis of return on equity, CST BRANDS INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • CST has underperformed the S&P 500 Index, declining 16.46% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Currently the debt-to-equity ratio of 1.60 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, CST maintains a poor quick ratio of 0.94, which illustrates the inability to avoid short-term cash problems.

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