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Trade-Ideas LLC identified
) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Walter Energy as such a stock due to the following factors:
- WLT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.4 million.
- WLT has traded 861,392 shares today.
- WLT is up 3.4% today.
- WLT was down 6.3% yesterday.
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More details on WLT:
Walter Energy, Inc. produces and exports metallurgical coal for the steel industry. The company operates through U.S. Operations, and Canadian and U.K. Operations segments. The stock currently has a dividend yield of 1.3%. Currently there is 1 analyst that rates Walter Energy a buy, 3 analysts rate it a sell, and 7 rate it a hold.
The average volume for Walter Energy has been 6.3 million shares per day over the past 30 days. Walter Energy has a market cap of $215.1 million and is part of the basic materials sector and metals & mining industry. The stock has a beta of 2.33 and a short float of 70.1% with 8.15 days to cover. Shares are down 82.2% year-to-date as of the close of trading on Tuesday.
rates Walter Energy as a
. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and generally high debt management risk.
Highlights from the ratings report include:
- 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 Metals & Mining industry and the overall market, WALTER ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for WALTER ENERGY INC is currently extremely low, coming in at 5.39%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -30.01% is significantly below that of the industry average.
- WLT'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 84.88%, 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. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The debt-to-equity ratio is very high at 7.01 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, WLT has managed to keep a strong quick ratio of 1.67, which demonstrates the ability to cover short-term cash needs.
- WLT, with its decline in revenue, underperformed when compared the industry average of 0.8%. Since the same quarter one year prior, revenues fell by 27.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full Walter Energy Ratings Report.