Trade-Ideas LLC identified

Ternium

(

TX

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

  • TX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.5 million.
  • TX has traded 63,488 shares today.
  • TX is trading at 7.67 times the normal volume for the stock at this time of day.
  • TX is trading at a new high 11.07% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 TX:

Ternium S.A. manufactures and processes various steel products in Mexico, Argentina, Bolivia, Chile, Paraguay, Uruguay, the United States, Central America, Colombia, and internationally. It operates through two segments, Steel and Mining. The stock currently has a dividend yield of 6.7%. TX has a PE ratio of 1. Currently there are 3 analysts that rate Ternium a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Ternium has been 300,100 shares per day over the past 30 days. Ternium has a market cap of $2.7 billion and is part of the basic materials sector and metals & mining industry. Shares are up 1.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ternium as a

sell

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

Highlights from the ratings report include:

  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market, TERNIUM SA -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for TERNIUM SA -ADR is rather low; currently it is at 21.69%. It has decreased from the same quarter the previous year.
  • Net operating cash flow has decreased to $251.47 million or 12.63% when compared to the same quarter last year. Despite a decrease in cash flow TERNIUM SA -ADR is still fairing well by exceeding its industry average cash flow growth rate of -31.85%.
  • TX'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 32.84%, 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.
  • Despite the weak revenue results, TX has significantly outperformed against the industry average of 50.5%. Since the same quarter one year prior, revenues fell by 12.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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