Trade-Ideas LLC identified

Teck Resources

(

TCK

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Teck Resources as such a stock due to the following factors:

  • TCK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $120.3 million.
  • TCK has traded 5.2 million shares today.
  • TCK is up 3.1% today.
  • TCK was down 7.5% yesterday.

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More details on TCK:

Teck Resources Limited explores, develops, and produces natural resources in the Americas, the Asia Pacific, and Europe. The company's principal products comprise steelmaking coal; copper concentrates and refined copper cathodes; refined zinc and zinc concentrates; and lead concentrates. The stock currently has a dividend yield of 0.8%. Currently there are 2 analysts that rate Teck Resources a buy, 5 analysts rate it a sell, and 6 rate it a hold.

The average volume for Teck Resources has been 11.4 million shares per day over the past 30 days. Teck has a market cap of $5.8 billion and is part of the basic materials sector and metals & mining industry. Shares are up 143.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Teck Resources as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, TECK RESOURCES LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for TECK RESOURCES LTD is currently lower than what is desirable, coming in at 27.33%. It has decreased from the same quarter the previous year.
  • TCK's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 32.43%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • TECK RESOURCES LTD has improved earnings per share by 33.3% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, TECK RESOURCES LTD swung to a loss, reporting -$4.30 versus $0.63 in the prior year.
  • Despite the weak revenue results, TCK has outperformed against the industry average of 43.5%. Since the same quarter one year prior, revenues fell by 16.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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