Trade-Ideas LLC identified

Trinseo

(

TSE

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

  • TSE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.0 million.
  • TSE has traded 1.4 million shares today.
  • TSE is trading at 185.14 times the normal volume for the stock at this time of day.
  • TSE is trading at a new low 5.02% 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 TSE:

Trinseo S.A., a materials company, manufactures and markets synthetic rubber, latex, and plastic products in Europe, the Middle East, North America, Latin America, and the Asia Pacific. The company operates through two segments, Performance Materials, and Basic Plastics and Feedstocks. TSE has a PE ratio of 14. Currently there are 3 analysts that rate Trinseo a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Trinseo has been 243,900 shares per day over the past 30 days. Trinseo has a market cap of $1.9 billion and is part of the consumer goods sector and consumer non-durables industry. Shares are up 34.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Trinseo as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:

  • Powered by its strong earnings growth of 244.26% and other important driving factors, this stock has surged by 98.34% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • TRINSEO SA reported significant earnings per share improvement 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 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, TRINSEO SA turned its bottom line around by earning $2.73 versus -$1.40 in the prior year. This year, the market expects an improvement in earnings ($5.40 versus $2.73).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to other companies in the Chemicals industry and the overall market on the basis of return on equity, TRINSEO SA has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • The gross profit margin for TRINSEO SA is rather low; currently it is at 15.81%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.80% trails the industry average.
  • The debt-to-equity ratio is very high at 3.10 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, TSE has managed to keep a strong quick ratio of 2.06, which demonstrates the ability to cover short-term cash needs.

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