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 $127.0 million.
  • POT has traded 1.4 million shares today.
  • POT is trading at 3.34 times the normal volume for the stock at this time of day.
  • POT is trading at a new low 4.01% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in POT with the Ticky from Trade-Ideas. See the FREE profile for POT NOW at Trade-Ideas

More details on POT:

TST Recommends

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 7.2%. POT has a PE ratio of 12. Currently there are 7 analysts that rate Potash Corp of Saskatchewan a buy, 1 analyst rates it a sell, and 10 rate it a hold.

The average volume for Potash Corp of Saskatchewan has been 6.4 million shares per day over the past 30 days. Potash Corp of Saskatchewan has a market cap of $17.7 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 0.50 and a short float of 2% with 2.44 days to cover. Shares are down 39.6% year-to-date as of the close of trading on Wednesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

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 expanding profit margins, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, unimpressive growth in net income and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • 45.87% is the gross profit margin for POTASH CORP SASK INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 24.09% significantly outperformed against the industry average.
  • Net operating cash flow has slightly increased to $836.00 million or 6.09% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -21.70%.
  • The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.75 is somewhat weak and could be cause for future problems.
  • Looking at the price performance of POT's shares over the past 12 months, there is not much good news to report: the stock is down 34.39%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • POTASH CORP SASK INC's earnings per share declined by 10.7% 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 4.1% in earnings ($1.76 versus $1.83).

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.