Trade-Ideas: Century Aluminum (CENX) Is Today's "Perilous Reversal" Stock - TheStreet

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

Century Aluminum

(

CENX

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Century Aluminum as such a stock due to the following factors:

  • CENX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $39.4 million.
  • CENX has traded 265,535 shares today.
  • CENX is down 4.6% today.
  • CENX was up 5.6% yesterday.

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More details on CENX:

Century Aluminum Company, together with its subsidiaries, produces and sells primary aluminum in the United States and Iceland. It provides standard grade and value-added primary aluminum products; and carbon products, such as anodes and cathodes. CENX has a PE ratio of 66.2. Currently there are 5 analysts that rate Century Aluminum a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Century Aluminum has been 1.5 million shares per day over the past 30 days. Century Aluminum has a market cap of $2.5 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.15 and a short float of 8.1% with 3.61 days to cover. Shares are up 181.6% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Century Aluminum as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 3.0%. Since the same quarter one year prior, revenues rose by 25.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 630.2% when compared to the same quarter one year prior, rising from -$9.51 million to $50.41 million.
  • Net operating cash flow has significantly increased by 357.27% to $89.09 million when compared to the same quarter last year. In addition, CENTURY ALUMINUM CO has also vastly surpassed the industry average cash flow growth rate of -54.81%.
  • Powered by its strong earnings growth of 572.72% and other important driving factors, this stock has surged by 217.83% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • CENTURY ALUMINUM CO 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, CENTURY ALUMINUM CO reported poor results of -$0.46 versus -$0.41 in the prior year. This year, the market expects an improvement in earnings ($1.10 versus -$0.46).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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