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

  • OLN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.8 million.
  • OLN has traded 130,119 shares today.
  • OLN is trading at 3.72 times the normal volume for the stock at this time of day.
  • OLN is trading at a new low 3.01% 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 OLN:

Olin Corporation manufactures and sells chlor alkali products in the United States and internationally. The company operates in three segments, Chlor Alkali Products, Chemical Distribution, and Winchester. The stock currently has a dividend yield of 3.2%. OLN has a PE ratio of 17.2. Currently there is 1 analyst that rates Olin a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Olin has been 689,800 shares per day over the past 30 days. Olin has a market cap of $2.0 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.41 and a short float of 13.8% with 11.68 days to cover. Shares are down 12.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Olin as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. 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 debt-to-equity ratio is somewhat low, currently at 0.61, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, OLN has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.
  • OLN, with its decline in revenue, underperformed when compared the industry average of 9.6%. Since the same quarter one year prior, revenues fell by 11.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has significantly decreased to $62.10 million or 58.79% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Chemicals industry and the overall market, OLIN CORP's return on equity is significantly below that of the industry average and is below that of 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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