Trade-Ideas LLC identified

AK Steel

(

AKS

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified AK Steel as such a stock due to the following factors:

  • AKS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $45.6 million.
  • AKS has traded 180,305 shares today.
  • AKS is up 3.4% today.
  • AKS was down 7.5% yesterday.

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More details on AKS:

AK Steel Holding Corporation, through its subsidiary, AK Steel Corporation, produces flat-rolled carbon, stainless and electrical steel, and tubular products in the United States and internationally. Currently there are 2 analysts that rate AK Steel a buy, 4 analysts rate it a sell, and 7 rate it a hold.

The average volume for AK Steel has been 13.4 million shares per day over the past 30 days. AK has a market cap of $868.7 million and is part of the basic materials sector and metals & mining industry. The stock has a beta of 3.00 and a short float of 21.5% with 3.15 days to cover. Shares are up 96.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates AK Steel as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:

  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 95.5% when compared to the same quarter one year prior, rising from -$306.30 million to -$13.60 million.
  • AK STEEL HOLDING CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AK STEEL HOLDING CORP reported poor results of -$2.86 versus -$0.74 in the prior year. This year, the market expects an improvement in earnings ($0.04 versus -$2.86).
  • Despite the weak revenue results, AKS has significantly outperformed against the industry average of 45.0%. Since the same quarter one year prior, revenues fell by 13.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for AK STEEL HOLDING CORP is currently extremely low, coming in at 10.88%. Regardless of AKS's low profit margin, it has managed to increase from the same period last year.

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