Trade-Ideas LLC identified

United States Steel

(

X

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified United States Steel as such a stock due to the following factors:

  • X has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $102.0 million.
  • X has traded 286,511 shares today.
  • X is down 3.7% today.
  • X was up 5.1% yesterday.

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More details on X:

United States Steel Corporation produces and sells flat-rolled and tubular steel products in North America and Europe. It operates through three segments: Flat-Rolled Products (Flat-Rolled), U. S. Steel Europe (USSE), and Tubular Products (Tubular). The stock currently has a dividend yield of 2.5%. Currently there are 4 analysts that rate United States Steel a buy, 4 analysts rate it a sell, and 5 rate it a hold.

The average volume for United States Steel has been 11.0 million shares per day over the past 30 days. United States has a market cap of $1.2 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.55 and a short float of 37.5% with 4.33 days to cover. Shares are down 68.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates United States Steel as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • The debt-to-equity ratio of 1.10 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, X maintains a poor quick ratio of 0.75, which illustrates the inability to avoid short-term cash problems.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, UNITED STATES STEEL CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for UNITED STATES STEEL CORP is currently extremely low, coming in at 6.22%. It has decreased from the same quarter the previous year.
  • X'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 74.10%, 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. 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.
  • UNITED STATES STEEL CORP has improved earnings per share by 16.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, UNITED STATES STEEL CORP turned its bottom line around by earning $0.63 versus -$11.68 in the prior year. For the next year, the market is expecting a contraction of 477.5% in earnings (-$2.38 versus $0.63).

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