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.

Trade-Ideas LLC identified SunCoke Energy ( SXC) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified SunCoke Energy as such a stock due to the following factors:

  • SXC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.9 million.
  • SXC has traded 72,276 shares today.
  • SXC is trading at 4.54 times the normal volume for the stock at this time of day.
  • SXC is trading at a new high 4.04% 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 SXC:

SunCoke Energy, Inc. operates as an independent producer of coke in the Americas. The company offers metallurgical and thermal coal for use as a raw material in the blast furnace steelmaking process. It also provides coal handling and blending services. The stock currently has a dividend yield of 1.9%. Currently there are 4 analysts that rate SunCoke Energy a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for SunCoke Energy has been 585,200 shares per day over the past 30 days. SunCoke Energy has a market cap of $1.0 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.95 and a short float of 2.1% with 3.33 days to cover. Shares are down 18.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates SunCoke Energy as a hold. Among the primary strengths of the company is its revenue growth. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 18.5%. Since the same quarter one year prior, revenues slightly increased by 0.1%. 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.
  • SUNCOKE ENERGY INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SUNCOKE ENERGY INC swung to a loss, reporting -$0.30 versus $0.58 in the prior year. This year, the market expects an improvement in earnings ($0.51 versus -$0.30).
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 27.35%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 272.72% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The gross profit margin for SUNCOKE ENERGY INC is rather low; currently it is at 16.77%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -17.29% is significantly below that of the industry average.
  • 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 695.5% when compared to the same quarter one year ago, falling from $11.00 million to -$65.50 million.

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