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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

Constellium

(

CSTM

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

  • CSTM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.8 million.
  • CSTM has traded 59,565 shares today.
  • CSTM is trading at 3.59 times the normal volume for the stock at this time of day.
  • CSTM is trading at a new low 4.00% 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 CSTM:

TheStreet Recommends

Constellium N.V. is engaged in the design, manufacture, and sale of specialty rolled and extruded aluminum products for the aerospace, packaging, and automotive end-markets. Currently there are 6 analysts that rate Constellium a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Constellium has been 668,300 shares per day over the past 30 days. Constellium has a market cap of $1.8 billion and is part of the industrial goods sector and industrial industry. Shares are down 4.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Constellium as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, deteriorating net income, poor profit margins, weak operating cash flow and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 43.09%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 154.54% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 152.8% when compared to the same quarter one year ago, falling from $45.70 million to -$24.16 million.
  • The gross profit margin for CONSTELLIUM NV is currently extremely low, coming in at 13.13%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.44% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $102.48 million or 30.09% when compared to the same quarter last year. Despite a decrease in cash flow CONSTELLIUM NV is still fairing well by exceeding its industry average cash flow growth rate of -46.77%.
  • CONSTELLIUM NV has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CONSTELLIUM NV reported lower earnings of $0.59 versus $1.28 in the prior year. This year, the market expects an improvement in earnings ($1.35 versus $0.59).

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