Trade-Ideas LLC identified

Potash Corp of Saskatchewan

(

POT

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

  • POT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $174.1 million.
  • POT has traded 2.5 million shares today.
  • POT is trading at 5.46 times the normal volume for the stock at this time of day.
  • POT is trading at a new low 6.03% 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 POT:

Potash Corporation of Saskatchewan Inc., together with its subsidiaries, produces and sells fertilizers and related industrial and feed products worldwide. The company operates in three segments: Potash, Nitrogen, and Phosphate. The stock currently has a dividend yield of 9.5%. POT has a PE ratio of 9. Currently there are 6 analysts that rate Potash Corp of Saskatchewan a buy, 2 analysts rate it a sell, and 10 rate it a hold.

The average volume for Potash Corp of Saskatchewan has been 7.9 million shares per day over the past 30 days. Potash Corp of Saskatchewan has a market cap of $13.3 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 0.53 and a short float of 2.1% with 1.36 days to cover. Shares are down 6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Potash Corp of Saskatchewan as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The current debt-to-equity ratio, 0.48, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that POT's debt-to-equity ratio is low, the quick ratio, which is currently 0.60, displays a potential problem in covering short-term cash needs.
  • 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. Compared to other companies in the Chemicals industry and the overall market on the basis of return on equity, POTASH CORP SASK INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • 39.11% is the gross profit margin for POTASH CORP SASK INC which we consider to be strong. Regardless of POT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, POT's net profit margin of 18.44% compares favorably to the industry average.
  • POTASH CORP SASK INC's earnings per share declined by 10.5% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, POTASH CORP SASK INC reported lower earnings of $1.83 versus $2.03 in the prior year. For the next year, the market is expecting a contraction of 13.1% in earnings ($1.59 versus $1.83).
  • Net operating cash flow has decreased to $358.00 million or 37.63% 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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