Trade-Ideas LLC identified

NCI Building Systems

(

NCS

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

  • NCS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.4 million.
  • NCS has traded 59,890 shares today.
  • NCS is trading at 2.10 times the normal volume for the stock at this time of day.
  • NCS is trading at a new low 3.05% 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 NCS with the Ticky from Trade-Ideas. See the FREE profile for NCS NOW at Trade-Ideas

More details on NCS:

NCI Building Systems, Inc., together with its subsidiaries, designs, engineers, manufactures, and markets metal products for the nonresidential construction industry in North America. It operates in three segments: Engineered Building Systems, Metal Components, and Metal Coil Coating. NCS has a PE ratio of 41. Currently there are 3 analysts that rate NCI Building Systems a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for NCI Building Systems has been 341,800 shares per day over the past 30 days. NCI Building Systems has a market cap of $985.4 million and is part of the industrial goods sector and materials & construction industry. Shares are up 13.8% year-to-date as of the close of trading on Tuesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates NCI Building Systems as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:

  • NCS's revenue growth has slightly outpaced the industry average of 7.0%. Since the same quarter one year prior, revenues rose by 14.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • NCI BUILDING SYSTEMS INC has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, NCI BUILDING SYSTEMS INC increased its bottom line by earning $0.25 versus $0.14 in the prior year. This year, the market expects an improvement in earnings ($0.62 versus $0.25).
  • Despite the current debt-to-equity ratio of 1.58, it is still below the industry average, suggesting that this level of debt is acceptable within the Building Products industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.84 is weak.
  • This stock's share value has moved by only 25.19% over the past year. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, NCS is still more expensive than most of the other companies in its industry.
  • Net operating cash flow has significantly decreased to -$4.20 million or 89.95% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.