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

  • SCS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.7 million.
  • SCS has traded 219,546 shares today.
  • SCS is trading at 9.58 times the normal volume for the stock at this time of day.
  • SCS is trading at a new high 8.13% 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 SCS:

Steelcase Inc. designs, manufactures, and distributes an integrated portfolio of furniture settings, user-centered technologies, and interior architectural products. The company operates through Americas, EMEA, and Other Category segments. The stock currently has a dividend yield of 2.7%. SCS has a PE ratio of 20.5. Currently there are 2 analysts that rate Steelcase a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Steelcase has been 531,300 shares per day over the past 30 days. Steelcase has a market cap of $1.4 billion and is part of the consumer goods sector and consumer durables industry. The stock has a beta of 1.33 and a short float of 1.8% with 4.97 days to cover. Shares are down 1.4% year-to-date as of the close of trading on Tuesday.

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 Steelcase as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, reasonable valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • SCS's revenue growth has slightly outpaced the industry average of 4.1%. Since the same quarter one year prior, revenues slightly increased by 8.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.42, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.20, which illustrates the ability to avoid short-term cash problems.
  • STEELCASE INC 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. We feel that this trend should continue. During the past fiscal year, STEELCASE INC increased its bottom line by earning $0.69 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($0.83 versus $0.69).
  • In its most recent trading session, SCS 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. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.

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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