Trade-Ideas LLC identified

Eastman Chemical

(

EMN

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

  • EMN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $77.5 million.
  • EMN has traded 510,000 shares today.
  • EMN is trading at 13.04 times the normal volume for the stock at this time of day.
  • EMN is trading at a new low 11.04% 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 EMN:

TheStreet Recommends

Eastman Chemical Company, a specialty chemical company, manufactures and sells materials, chemicals, and fibers in the United States and internationally. The stock currently has a dividend yield of 3%. EMN has a PE ratio of 13. Currently there are 8 analysts that rate Eastman Chemical a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Eastman Chemical has been 1.2 million shares per day over the past 30 days. Eastman Chemical has a market cap of $9.2 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.43 and a short float of 2.3% with 2.38 days to cover. Shares are down 6.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Eastman Chemical as a

hold

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

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 18.7%. Since the same quarter one year prior, revenues slightly increased by 1.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 21.9% when compared to the same quarter one year prior, going from $210.00 million to $256.00 million.
  • EASTMAN CHEMICAL CO has improved earnings per share by 23.0% 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, EASTMAN CHEMICAL CO reported lower earnings of $4.94 versus $7.45 in the prior year. This year, the market expects an improvement in earnings ($7.25 versus $4.94).
  • Currently the debt-to-equity ratio of 1.88 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, EMN maintains a poor quick ratio of 0.79, which illustrates the inability to avoid short-term cash problems.
  • Net operating cash flow has decreased to $368.00 million or 34.28% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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