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Trade-Ideas LLC identified
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Mechel OAO as such a stock due to the following factors:
- MTL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.6 million.
- MTL has traded 1.7 million shares today.
- MTL is trading at 24.34 times the normal volume for the stock at this time of day.
- MTL is trading at a new low 6.19% 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 MTL:
Mechel OAO, together with its subsidiaries, is engaged in mining and steel businesses in the Russian Federation, other CIS countries, Europe, Asia, the Middle East, the United States, and internationally. The company operates through four segments: Mining, Steel, Ferroalloys, and Power. Currently there are no analysts that rate Mechel OAO a buy, 4 analysts rate it a sell, and none rate it a hold.
The average volume for Mechel OAO has been 811,400 shares per day over the past 30 days. Mechel OAO has a market cap of $313.4 million and is part of the basic materials sector and metals & mining industry. Shares are down 70.6% year-to-date as of the close of trading on Tuesday.
rates Mechel OAO as a
. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- The debt-to-equity ratio is very high at 18.21 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.32, which clearly demonstrates the inability to cover short-term cash needs.
- 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, MECHEL OAO's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to $9.59 million or 95.30% 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 gross profit margin for MECHEL OAO is currently lower than what is desirable, coming in at 33.79%. Regardless of MTL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, MTL's net profit margin of -36.16% significantly underperformed when compared to the industry average.
- MTL'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 79.01%, 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.
- You can view the full Mechel OAO Ratings Report.