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

  • ATU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.3 million.
  • ATU has traded 73,592 shares today.
  • ATU is trading at 6.13 times the normal volume for the stock at this time of day.
  • ATU is trading at a new low 3.06% 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 ATU:

Actuant Corporation designs, manufactures, and distributes a range of industrial products and systems worldwide. It operates in three segments: Industrial, Energy, and Engineered Solutions. The stock currently has a dividend yield of 0.1%. ATU has a PE ratio of 14.7. Currently there are 4 analysts that rate Actuant a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Actuant has been 643,900 shares per day over the past 30 days. Actuant has a market cap of $1.9 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.20 and a short float of 2.7% with 3.85 days to cover. Shares are down 20.1% year-to-date as of the close of trading on Wednesday.

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 Actuant 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, reasonable valuation levels, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • ATU's revenue growth has slightly outpaced the industry average of 2.8%. Since the same quarter one year prior, revenues slightly increased by 8.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.39, 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 1.12, which illustrates the ability to avoid short-term cash problems.
  • 42.15% is the gross profit margin for ACTUANT CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.04% is above that of the industry average.
  • ACTUANT CORP's earnings per share declined by 15.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, ACTUANT CORP reported lower earnings of $1.95 versus $1.98 in the prior year. This year, the market expects an improvement in earnings ($2.10 versus $1.95).

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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