Magna International (MGA): Today's Weak 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 Magna International ( MGA) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Magna International as such a stock due to the following factors:

  • MGA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $63.7 million.
  • MGA has traded 175,657 shares today.
  • MGA is trading at 5.89 times the normal volume for the stock at this time of day.
  • MGA is trading at a new low 3.00% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in MGA with the Ticky from Trade-Ideas. See the FREE profile for MGA NOW at Trade-Ideas

More details on MGA:

Magna International Inc. develops, manufactures, engineers, supplies, and sells automotive products. It operates through North America, Europe, Asia, and Rest of World segments. The stock currently has a dividend yield of 1.5%. MGA has a PE ratio of 13.5. Currently there are 7 analysts that rate Magna International a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Magna International has been 457,600 shares per day over the past 30 days. Magna International has a market cap of $21.6 billion and is part of the services sector and wholesale industry. Shares are up 20.5% year-to-date as of the close of trading on Monday.

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 Magna International as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • MAGNA INTERNATIONAL INC has improved earnings per share by 30.3% 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, MAGNA INTERNATIONAL INC increased its bottom line by earning $6.77 versus $6.09 in the prior year. This year, the market expects an improvement in earnings ($8.65 versus $6.77).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Auto Components industry average. The net income increased by 22.9% when compared to the same quarter one year prior, going from $415.00 million to $510.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.0%. Since the same quarter one year prior, revenues slightly increased by 5.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MGA's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.00, which illustrates the ability to avoid short-term cash problems.

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

null

More from Markets

Stocks Turn Lower as 10-Year Yield Hits 3%

Stocks Turn Lower as 10-Year Yield Hits 3%

Apple Suppliers Slide After European, Asian Chipmakers Echo Smartphone Concerns

Apple Suppliers Slide After European, Asian Chipmakers Echo Smartphone Concerns

Tuesday's Market Movers: CAT, UTX, KO, MMM

Tuesday's Market Movers: CAT, UTX, KO, MMM

Wall Street Is Totally Forgetting Apple Will Be Giving Away Tons of Cash in 2018

Wall Street Is Totally Forgetting Apple Will Be Giving Away Tons of Cash in 2018

Vivendi Slides After Reports Vincent Bollore Questioned in Corruption Probe

Vivendi Slides After Reports Vincent Bollore Questioned in Corruption Probe