Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.
Trade-Ideas LLC identified
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Harsco as such a stock due to the following factors:
- HSC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.0 million.
- HSC has traded 141,696 shares today.
- HSC is trading at 4.46 times the normal volume for the stock at this time of day.
- HSC is trading at a new low 5.09% 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 HSC:
Harsco Corporation provides industrial services and engineered products worldwide. The company operates through three segments: Harsco Metals and Minerals, Harsco Rail, and Harsco Industrial. The stock currently has a dividend yield of 6.2%. Currently there is 1 analyst that rates Harsco a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Harsco has been 931,000 shares per day over the past 30 days. Harsco has a market cap of $1.1 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.69 and a short float of 4.1% with 2.55 days to cover. Shares are down 36.5% year-to-date as of the close of trading on Wednesday.
rates Harsco as a
. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- The debt-to-equity ratio is very high at 3.05 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, HSC maintains a poor quick ratio of 0.75, which illustrates the inability to avoid short-term cash problems.
- The gross profit margin for HARSCO CORP is currently lower than what is desirable, coming in at 28.63%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.38% trails that of the industry average.
- Net operating cash flow has significantly decreased to $10.47 million or 61.95% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- HSC'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 46.41%, 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. 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's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Machinery industry and the overall market, HARSCO CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Harsco Ratings Report.