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 "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Nucor as such a stock due to the following factors:
- NUE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $119.5 million.
- NUE has traded 166,760 shares today.
- NUE traded in a range 206% of the normal price range with a price range of $1.85.
- NUE traded above its daily resistance level (quality: 5 days, meaning that the stock is crossing a resistance level set by the last 5 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on NUE:
Nucor Corporation, together with its subsidiaries, engages in the manufacture and sale of steel and steel products in North America and internationally. It operates through three segments: Steel Mills, Steel Products, and Raw Materials. The stock currently has a dividend yield of 3%. NUE has a PE ratio of 35.3. Currently there are 7 analysts that rate Nucor a buy, 1 analyst rates it a sell, and 6 rate it a hold.
The average volume for Nucor has been 1.6 million shares per day over the past 30 days. Nucor has a market cap of $16.0 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.54 and a short float of 2.5% with 3.41 days to cover. Shares are down 8.7% year-to-date as of the close of trading on Friday.
rates Nucor as a
. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Metals & Mining industry average. The net income increased by 33.8% when compared to the same quarter one year prior, rising from $110.31 million to $147.60 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 3.2%. Since the same quarter one year prior, revenues slightly increased by 2.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.58, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that NUE's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.85 is high and demonstrates strong liquidity.
- NUCOR CORP has improved earnings per share by 31.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NUCOR CORP reported lower earnings of $1.59 versus $2.44 in the prior year. For the next year, the market is expecting a contraction of 13.2% in earnings ($1.38 versus $1.59).
- In its most recent trading session, NUE has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full Nucor Ratings Report.