Trade-Ideas LLC identified

Ternium

(

TX

) as a weak 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 $7.8 million.
  • TX has traded 208,969 shares today.
  • TX is trading at 14.95 times the normal volume for the stock at this time of day.
  • TX is trading at a new low 15.15% 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 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 4.8%. TX has a PE ratio of 15. Currently there are 3 analysts that rate Ternium a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Ternium has been 410,200 shares per day over the past 30 days. Ternium has a market cap of $3.8 billion and is part of the basic materials sector and metals & mining industry. Shares are up 47.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ternium as a

hold

. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • TERNIUM SA -ADR has improved earnings per share by 37.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, TERNIUM SA -ADR turned its bottom line around by earning $0.05 versus -$4.27 in the prior year. This year, the market expects an improvement in earnings ($1.93 versus $0.05).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 37.9% when compared to the same quarter one year prior, rising from $68.46 million to $94.40 million.
  • The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that TX's debt-to-equity ratio is low, the quick ratio, which is currently 0.60, displays a potential problem in covering short-term cash needs.
  • Net operating cash flow has decreased to $237.40 million or 26.68% 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 -40.05%.
  • The gross profit margin for TERNIUM SA -ADR is rather low; currently it is at 22.28%. It has decreased from the same quarter the previous year.

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