Trade-Ideas LLC identified

Federal-Mogul Holdings

(

FDML

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Federal-Mogul Holdings as such a stock due to the following factors:

  • FDML has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.8 million.
  • FDML has traded 141,268 shares today.
  • FDML is trading at 2.57 times the normal volume for the stock at this time of day.
  • FDML is trading at a new high 7.00% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 FDML:

Federal-Mogul Holdings Corporation supplies various components, accessories, and systems to the manufacturers and servicers of vehicles and equipment worldwide. It operates in two segments, Powertrain and Motorparts. Currently there is 1 analyst that rates Federal-Mogul Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Federal-Mogul Holdings has been 422,900 shares per day over the past 30 days. Federal-Mogul has a market cap of $1.5 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 2.94 and a short float of 9.1% with 2.39 days to cover. Shares are up 31.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Federal-Mogul Holdings as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Auto Components industry. The net income has significantly decreased by 250.0% when compared to the same quarter one year ago, falling from -$18.00 million to -$63.00 million.
  • The debt-to-equity ratio is very high at 3.55 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, FDML maintains a poor quick ratio of 0.89, which illustrates the inability to avoid short-term cash problems.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Auto Components industry and the overall market, FEDERAL-MOGUL HOLDINGS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $66.00 million or 34.65% 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.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 33.21%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 208.33% compared to 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.

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