Century Aluminum (CENX) Is Weak On High Volume Today

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 Century Aluminum ( CENX) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Century Aluminum as such a stock due to the following factors:

  • CENX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $55.9 million.
  • CENX has traded 437,988 shares today.
  • CENX is trading at 6.93 times the normal volume for the stock at this time of day.
  • CENX is trading at a new low 3.01% 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 CENX:

Century Aluminum Company, together with its subsidiaries, produces and sells primary aluminum in the United States and Iceland. It provides standard grade and value-added primary aluminum products; and carbon products, such as anodes and cathodes. Currently there are 4 analysts that rate Century Aluminum a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Century Aluminum has been 948,000 shares per day over the past 30 days. Century Aluminum has a market cap of $2.5 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.86 and a short float of 6.1% with 2.27 days to cover. Shares are up 168.4% year-to-date as of the close of trading on Friday.

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 Century Aluminum as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 0.6%. Since the same quarter one year prior, revenues rose by 38.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 163.63% and other important driving factors, this stock has surged by 259.53% 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.
  • CENTURY ALUMINUM CO 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, CENTURY ALUMINUM CO reported poor results of -$0.46 versus -$0.41 in the prior year. This year, the market expects an improvement in earnings ($1.06 versus -$0.46).
  • 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 169.2% when compared to the same quarter one year prior, rising from -$29.38 million to $20.34 million.
  • The gross profit margin for CENTURY ALUMINUM CO is currently extremely low, coming in at 12.30%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.43% trails the industry average.

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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