Companhia Siderurgica Nacional (SID) Marked As A Dead Cat Bounce Stock

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 Companhia Siderurgica Nacional ( SID) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Companhia Siderurgica Nacional as such a stock due to the following factors:

  • SID has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.3 million.
  • SID has traded 268,265 shares today.
  • SID is up 4.5% today.
  • SID was down 5.4% yesterday.

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More details on SID:

Companhia Siderurgica Nacional operates as an integrated steel producer primarily in Brazil. The company principally produces carbon steel and various steel products for automotive, home appliance, packaging, construction, and steel processing industries. The stock currently has a dividend yield of 8.1%. Currently there are no analysts that rate Companhia Siderurgica Nacional a buy, 2 analysts rate it a sell, and 1 rates it a hold.

The average volume for Companhia Siderurgica Nacional has been 5.8 million shares per day over the past 30 days. Companhia Siderurgica Nacional has a market cap of $6.1 billion and is part of the basic materials sector and metals & mining industry. Shares are down 31.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Companhia Siderurgica Nacional as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • 39.99% is the gross profit margin for COMPANHIA SIDERURGICA NACION which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -13.88% is in-line with the industry average.
  • 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. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, COMPANHIA SIDERURGICA NACION has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Net operating cash flow has significantly decreased to $299.69 million or 69.19% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • 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 247.7% when compared to the same quarter one year ago, falling from $165.67 million to -$244.66 million.

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