Trade-Ideas: Baltic Trading (BALT) 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 Baltic Trading ( BALT) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Baltic Trading as such a stock due to the following factors:

  • BALT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.9 million.
  • BALT has traded 237,027 shares today.
  • BALT is trading at 8.51 times the normal volume for the stock at this time of day.
  • BALT is trading at a new high 6.44% 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 BALT:

Baltic Trading Limited is engaged in shipping business in the drybulk industry spot market worldwide. The company operates a fleet of drybulk ships that transport iron ore, coal, grain, steel products, and other dry bulk cargoes. The stock currently has a dividend yield of 0.7%. Currently there are 4 analysts that rate Baltic Trading a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Baltic Trading has been 648,400 shares per day over the past 30 days. Baltic Trading has a market cap of $178.7 million and is part of the services sector and transportation industry. The stock has a beta of 1.72 and a short float of 11.6% with 3.55 days to cover. Shares are down 37.3% 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 Baltic Trading as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • BALT's very impressive revenue growth greatly exceeded the industry average of 10.8%. Since the same quarter one year prior, revenues leaped by 67.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • BALTIC TRADING LTD has improved earnings per share by 47.4% 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, BALTIC TRADING LTD continued to lose money by earning -$0.49 versus -$0.77 in the prior year. This year, the market expects an improvement in earnings (-$0.25 versus -$0.49).
  • Despite currently having a low debt-to-equity ratio of 0.44, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.16 is very high and demonstrates very strong liquidity.
  • BALT's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 34.05%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Marine industry. The net income has decreased by 22.7% when compared to the same quarter one year ago, dropping from -$4.63 million to -$5.67 million.

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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