Today's Weak On High Volume Stock: AGCO (AGCO)

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

  • AGCO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $50.0 million.
  • AGCO has traded 272,841 shares today.
  • AGCO is trading at 5.95 times the normal volume for the stock at this time of day.
  • AGCO is trading at a new low 4.03% 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 AGCO:

AGCO Corporation manufactures and distributes agricultural equipment and related replacement parts worldwide. The stock currently has a dividend yield of 1%. AGCO has a PE ratio of 9.1. Currently there is 1 analyst that rates AGCO a buy, 2 analysts rate it a sell, and 12 rate it a hold.

The average volume for AGCO has been 1.5 million shares per day over the past 30 days. AGCO has a market cap of $4.1 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.68 and a short float of 14.1% with 10.34 days to cover. Shares are down 24.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates AGCO as a hold. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that AGCO's debt-to-equity ratio is low, the quick ratio, which is currently 0.59, displays a potential problem in covering short-term cash needs.
  • AGCO, with its decline in revenue, underperformed when compared the industry average of 2.5%. Since the same quarter one year prior, revenues fell by 13.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for AGCO CORP is rather low; currently it is at 22.42%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.01% trails that of the industry average.
  • Net operating cash flow has significantly decreased to $38.90 million or 62.59% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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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