Silver Wheaton (SLW) Weak On High Volume Today - TheStreet

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 or Stephanie Link.

Trade-Ideas LLC identified

Silver Wheaton

(

SLW

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

  • SLW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $82.0 million.
  • SLW has traded 918,982 shares today.
  • SLW is trading at 3.52 times the normal volume for the stock at this time of day.
  • SLW 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.

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More details on SLW:

Silver Wheaton Corp. operates as a precious metals streaming company worldwide. The company has 20 long-term purchase agreements and 1 early deposit long-term purchase agreement associated with silver and/or gold relating to 24 different mining assets. The stock currently has a dividend yield of 1.2%. SLW has a PE ratio of 22.6. Currently there are 10 analysts that rate Silver Wheaton a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Silver Wheaton has been 4.5 million shares per day over the past 30 days. Silver Wheaton has a market cap of $7.1 billion and is part of the basic materials sector and metals & mining industry. Shares are down 4.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Silver Wheaton 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:

  • SLW's debt-to-equity ratio is very low at 0.29 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 7.39, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for SILVER WHEATON CORP is currently very high, coming in at 76.19%. Regardless of SLW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SLW's net profit margin of 42.73% significantly outperformed against the industry.
  • SLW, with its decline in revenue, underperformed when compared the industry average of 0.7%. Since the same quarter one year prior, revenues fell by 11.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Metals & Mining industry average. The net income has decreased by 10.7% when compared to the same quarter one year ago, dropping from $71.12 million to $63.49 million.
  • Net operating cash flow has decreased to $102.54 million or 18.13% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, SILVER WHEATON CORP has marginally lower results.

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