Turquoise Hill Resources (TRQ) Is Today's Strong On High Volume 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 Turquoise Hill Resources ( TRQ) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Turquoise Hill Resources as such a stock due to the following factors:

  • TRQ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.1 million.
  • TRQ has traded 938,829 shares today.
  • TRQ is trading at 9.23 times the normal volume for the stock at this time of day.
  • TRQ is trading at a new high 3.16% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 TRQ:

Turquoise Hill Resources Ltd., together with its subsidiaries, operates as a mineral exploration, development, and mining company. The company's principal mineral resource property includes the Oyu Tolgoi project, a copper-gold project located in the South Gobi region of Mongolia. TRQ has a PE ratio of 353.0. Currently there is 1 analyst that rates Turquoise Hill Resources a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Turquoise Hill Resources has been 2.8 million shares per day over the past 30 days. Turquoise Hill has a market cap of $7.1 billion and is part of the basic materials sector and metals & mining industry. Shares are up 15.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Turquoise Hill Resources as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • TRQ's very impressive revenue growth greatly exceeded the industry average of 0.7%. Since the same quarter one year prior, revenues leaped by 7123.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • TURQUOISE HILL RESOURCES LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, TURQUOISE HILL RESOURCES LTD continued to lose money by earning -$0.05 versus -$0.37 in the prior year.
  • TRQ's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.37 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • In its most recent trading session, TRQ 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.
  • The gross profit margin for TURQUOISE HILL RESOURCES LTD is currently lower than what is desirable, coming in at 33.82%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, TRQ's net profit margin of 2.15% is significantly lower than the industry average.

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