Today's Dead Cat Bounce Stock Is Companhia Siderurgica Nacional (SID)

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 $38.6 million.
  • SID has traded 741,434 shares today.
  • SID is up 8.9% today.
  • SID was down 7.1% yesterday.

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More details on SID:

Companhia Siderurgica Nacional operates as an integrated steel producer primarily in Brazil. It operates through five segments: Steel, Mining, Cement, Logistics, and Energy. The stock currently has a dividend yield of 6.6%. SID has a PE ratio of 34.0. 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 4.2 million shares per day over the past 30 days. Companhia Siderurgica Nacional has a market cap of $7.4 billion and is part of the basic materials sector and metals & mining industry. Shares are down 23.6% year-to-date as of the close of trading on Thursday.

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

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 revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • SID's revenue growth has slightly outpaced the industry average of 4.5%. Since the same quarter one year prior, revenues slightly increased by 7.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 93.06% 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.
  • 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.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Metals & Mining industry average, but is greater than that of the S&P 500. The net income increased by 81.5% when compared to the same quarter one year prior, rising from $13.52 million to $24.54 million.
  • The debt-to-equity ratio is very high at 3.81 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, SID has managed to keep a strong quick ratio of 1.88, which demonstrates the ability to cover short-term cash needs.

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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