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 or Stephanie Link.
Trade-Ideas LLC identified
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Ternium as such a stock due to the following factors:
- TX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.0 million.
- TX has traded 72,789 shares today.
- TX is trading at 6.33 times the normal volume for the stock at this time of day.
- TX is trading at a new low 5.19% 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.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in TX with the Ticky from Trade-Ideas. See the FREE profile for TX NOW at Trade-Ideas
More details on TX:
Ternium S.A., together with its subsidiaries, manufactures and processes flat and long steel products for the construction, automotive, home appliances, capital goods, container, and food and energy industries. The company operates trough two segments, Steel and Mining. The stock currently has a dividend yield of 4.2%. TX has a PE ratio of 6.7. Currently there are 3 analysts that rate Ternium a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Ternium has been 376,000 shares per day over the past 30 days. Ternium has a market cap of $3.5 billion and is part of the basic materials sector and metals & mining industry. Shares are down 0.6% year-to-date as of the close of trading on Friday.
rates Ternium as a
. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- TERNIUM SA -ADR has improved earnings per share by 14.0% 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, TERNIUM SA -ADR increased its bottom line by earning $2.32 versus $0.72 in the prior year. This year, the market expects an improvement in earnings ($2.63 versus $2.32).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Metals & Mining industry average. The net income increased by 14.2% when compared to the same quarter one year prior, going from $97.85 million to $111.69 million.
- The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that TX's debt-to-equity ratio is low, the quick ratio, which is currently 0.67, displays a potential problem in covering short-term cash needs.
- Net operating cash flow has declined marginally to $287.82 million or 0.74% when compared to the same quarter last year. Despite a decrease in cash flow TERNIUM SA -ADR is still fairing well by exceeding its industry average cash flow growth rate of -31.21%.
- The gross profit margin for TERNIUM SA -ADR is rather low; currently it is at 24.98%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.03% significantly trails the industry average.
- You can view the full Ternium Ratings Report.