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Trade-Ideas LLC identified
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Gulf Resources as such a stock due to the following factors:
- GURE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.5 million.
- GURE has traded 807,233 shares today.
- GURE is trading at 56.70 times the normal volume for the stock at this time of day.
- GURE is trading at a new low 3.41% 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 GURE:
Gulf Resources, Inc., together with its subsidiaries, manufactures and trades in bromine and crude salt products in the People's Republic of China. It operates in three segments: Bromine, Crude Salt, and Chemical Products. GURE has a PE ratio of 2.3.
The average volume for Gulf Resources has been 99,800 shares per day over the past 30 days. Gulf has a market cap of $45.7 million and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.49 and a short float of 0.3% with 0.03 days to cover. Shares are up 51.7% year-to-date as of the close of trading on Friday.
rates Gulf Resources as a
. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- GURE's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 16.25, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for GULF RESOURCES INC is rather high; currently it is at 50.53%. Regardless of GURE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GURE's net profit margin of 16.19% compares favorably to the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 48.70%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 38.09% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Chemicals industry. The net income has significantly decreased by 37.9% when compared to the same quarter one year ago, falling from $8.11 million to $5.04 million.
- You can view the full Gulf Resources Ratings Report.