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.
Trade-Ideas LLC identified
) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified FreightCar America as such a stock due to the following factors:
- RAIL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.3 million.
- RAIL has traded 115,947 shares today.
- RAIL is trading at 16.12 times the normal volume for the stock at this time of day.
- RAIL is trading at a new high 15.04% 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 RAIL:
FreightCar America, Inc., through its subsidiaries, designs, manufactures, and sells aluminum-bodied railcars and coal cars that transport various non-liquid commodities and products primarily in North America. The company operates through two segments, Manufacturing and Services. The stock currently has a dividend yield of 1.9%. RAIL has a PE ratio of 21. Currently there is 1 analyst that rates FreightCar America a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for FreightCar America has been 145,600 shares per day over the past 30 days. FreightCar America has a market cap of $228.9 million and is part of the services sector and transportation industry. The stock has a beta of 2.50 and a short float of 8.9% with 5.79 days to cover. Shares are down 31% year-to-date as of the close of trading on Wednesday.
rates FreightCar America as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, weak operating cash flow and poor profit margins.
Highlights from the ratings report include:
- RAIL's very impressive revenue growth greatly exceeded the industry average of 15.1%. Since the same quarter one year prior, revenues leaped by 65.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- FREIGHTCAR AMERICA INC reported significant earnings per share improvement 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, FREIGHTCAR AMERICA INC turned its bottom line around by earning $0.47 versus -$1.62 in the prior year. This year, the market expects an improvement in earnings ($1.80 versus $0.47).
- RAIL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.99 is somewhat weak and could be cause for future problems.
- Net operating cash flow has significantly decreased to -$78.51 million or 72.03% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- RAIL has underperformed the S&P 500 Index, declining 14.49% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- You can view the full FreightCar America Ratings Report.