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

Tenaris

(

TS

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

  • TS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $101.5 million.
  • TS has traded 526,246 shares today.
  • TS is trading at 4.25 times the normal volume for the stock at this time of day.
  • TS is trading at a new low 3.01% 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 TS:

Tenaris S.A., through its subsidiaries, manufactures and supplies steel pipe products and related services for the energy and other industrial applications. The stock currently has a dividend yield of 3.5%. TS has a PE ratio of 11. Currently there is 1 analyst that rates Tenaris a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Tenaris has been 2.1 million shares per day over the past 30 days. Tenaris has a market cap of $15.0 billion and is part of the basic materials sector and metals & mining industry. Shares are down 11% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Tenaris as a

hold

. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • TS's debt-to-equity ratio is very low at 0.10 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, TS has a quick ratio of 1.84, which demonstrates the ability of the company to cover short-term liquidity needs.
  • TS, with its decline in revenue, slightly underperformed the industry average of 22.4%. Since the same quarter one year prior, revenues fell by 29.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has declined marginally to $548.09 million or 3.24% when compared to the same quarter last year. Despite a decrease in cash flow TENARIS SA is still fairing well by exceeding its industry average cash flow growth rate of -14.68%.
  • 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. In comparison to the other companies in the Energy Equipment & Services industry and the overall market, TENARIS SA's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The gross profit margin for TENARIS SA is currently lower than what is desirable, coming in at 29.10%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 3.54% trails that of the industry average.

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