Sinocoking Coal And Coke Chemicals (SCOK) Flagged As Strong On High Volume

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 Sinocoking Coal and Coke Chemicals ( SCOK) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Sinocoking Coal and Coke Chemicals as such a stock due to the following factors:

  • SCOK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.7 million.
  • SCOK has traded 609,417 shares today.
  • SCOK is trading at 4.02 times the normal volume for the stock at this time of day.
  • SCOK is trading at a new high 18.21% 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 SCOK:

SinoCoking Coal and Coke Chemical Industries, Inc. operates as a coal and coke producer in the People's Republic of China. Its products include raw coal, washed coal, medium or mid-coal, coal slurries, coke, coal tar, and crude benzol.

The average volume for Sinocoking Coal and Coke Chemicals has been 3.3 million shares per day over the past 30 days. Sinocoking Coal and Coke has a market cap of $76.0 million and is part of the basic materials sector and metals & mining industry. The stock has a beta of 0.07 and a short float of 5.5% with 0.47 days to cover. Shares are up 149.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sinocoking Coal and Coke Chemicals as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, SCOK's share price has jumped by 207.89%, exceeding the performance of the broader market during that same time frame. Although SCOK had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry average. The net income increased by 11.0% when compared to the same quarter one year prior, going from -$0.95 million to -$0.84 million.
  • 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 SCOK's debt-to-equity ratio is low, the quick ratio, which is currently 0.56, displays a potential problem in covering short-term cash needs.
  • Net operating cash flow has significantly decreased to $0.10 million or 92.44% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SINOCOKING COAL & COKE CHEM's return on equity significantly trails that of both the industry average and the S&P 500.

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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