ArcelorMittal (MT) Off To A Strong Start In Pre-Market Activity

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 ArcelorMittal ( MT) as a pre-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified ArcelorMittal as such a stock due to the following factors:

  • MT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $151.2 million.
  • MT traded 20,102 shares today in the pre-market hours as of 8:00 AM.
  • MT is up 2.3% today from yesterday's close.

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More details on MT:

ArcelorMittal, together with its subsidiaries, operates as an integrated steel and mining company worldwide. The company operates through six segments: Flat Carbon Americas; Flat Carbon Europe; Long Carbon Americas and Europe; Asia, Africa, and CIS; Distribution Solutions; and Mining. The stock currently has a dividend yield of 1%. Currently there are 5 analysts that rate ArcelorMittal a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for ArcelorMittal has been 5.1 million shares per day over the past 30 days. ArcelorMittal has a market cap of $25.5 billion and is part of the basic materials sector and metals & mining industry. Shares are down 7.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates ArcelorMittal as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, generally disappointing historical performance in the stock itself and generally high debt management risk.

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, ARCELORMITTAL SA's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, MT has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Despite currently having a low debt-to-equity ratio of 0.45, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.44 is very low and demonstrates very weak liquidity.
  • MT, with its decline in revenue, slightly underperformed the industry average of 2.4%. Since the same quarter one year prior, revenues slightly dropped by 0.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • ARCELORMITTAL SA reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ARCELORMITTAL SA swung to a loss, reporting -$2.38 versus $0.86 in the prior year. This year, the market expects an improvement in earnings (-$0.61 versus -$2.38).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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