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 weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Walter Energy as such a stock due to the following factors:
- WLT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.3 million.
- WLT has traded 1.1 million shares today.
- WLT is trading at 2.48 times the normal volume for the stock at this time of day.
- WLT is trading at a new low 11.11% 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 WLT:
Walter Energy, Inc. produces and exports metallurgical coal for the steel industry. The company operates through U.S. Operations, and Canadian and U.K. Operations segments. The stock currently has a dividend yield of 1.7%. Currently there is 1 analyst that rates Walter Energy a buy, 2 analysts rate it a sell, and 8 rate it a hold.
The average volume for Walter Energy has been 6.0 million shares per day over the past 30 days. Walter Energy has a market cap of $155.4 million and is part of the basic materials sector and metals & mining industry. The stock has a beta of 2.63 and a short float of 70.1% with 8.78 days to cover. Shares are down 85.9% year-to-date as of the close of trading on Wednesday.
rates Walter Energy as a
. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, weak operating cash flow, generally high debt management risk and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 338.9% when compared to the same quarter one year ago, falling from -$34.49 million to -$151.39 million.
- The gross profit margin for WALTER ENERGY INC is currently extremely low, coming in at 5.48%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -40.01% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$74.40 million or 1481.59% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The debt-to-equity ratio is very high at 5.20 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, WLT's quick ratio is somewhat strong at 1.10, demonstrating the ability to handle short-term liquidity needs.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 84.79%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 323.63% compared to the year-earlier 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.
- You can view the full Walter Energy Ratings Report.