Companhia Siderurgica Nacional (SID) Is Strong On High Volume Today

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

  • SID has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.5 million.
  • SID has traded 1.5 million shares today.
  • SID is trading at 4.05 times the normal volume for the stock at this time of day.
  • SID is trading at a new high 3.14% 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 SID:

Companhia Siderurgica Nacional operates as an integrated steel producer primarily in Brazil. It operates through five segments: Steel, Mining, Cement, Logistics, and Energy. The stock currently has a dividend yield of 15.1%. SID has a PE ratio of 14.9. Currently there are no analysts that rate Companhia Siderurgica Nacional a buy, 2 analysts rate it a sell, and none rate it a hold.

The average volume for Companhia Siderurgica Nacional has been 5.4 million shares per day over the past 30 days. Companhia Siderurgica Nacional has a market cap of $3.1 billion and is part of the basic materials sector and metals & mining industry. Shares are down 63.9% 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 Companhia Siderurgica Nacional as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally high debt management risk.

Highlights from the ratings report include:
  • 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 Metals & Mining industry. The net income has significantly decreased by 231.8% when compared to the same quarter one year ago, falling from $223.90 million to -$295.13 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, COMPANHIA SIDERURGICA NACION underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for COMPANHIA SIDERURGICA NACION is currently lower than what is desirable, coming in at 31.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -24.53% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to $56.15 million or 79.37% 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.
  • The debt-to-equity ratio is very high at 4.88 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, SID has managed to keep a strong quick ratio of 1.61, which demonstrates the ability to cover short-term cash needs.

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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