Strong On High Volume: Synthesis Energy Sys (SYMX)

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

  • SYMX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.3 million.
  • SYMX has traded 117,303 shares today.
  • SYMX is trading at 2.74 times the normal volume for the stock at this time of day.
  • SYMX is trading at a new high 4.02% 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 SYMX:

Synthesis Energy Systems, Inc., a development stage energy and gasification technology company, provides various proprietary gasification technology systems and solutions to the energy and chemical industries worldwide.

The average volume for Synthesis Energy Sys has been 563,900 shares per day over the past 30 days. Synthesis Energy Sys has a market cap of $121.1 million and is part of the basic materials sector and chemicals industry. The stock has a beta of 0.57 and a short float of 1% with 0.23 days to cover. Shares are up 50% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Synthesis Energy Sys as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

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 Energy Equipment & Services industry. The net income has significantly decreased by 1683.5% when compared to the same quarter one year ago, falling from -$1.44 million to -$25.59 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 Energy Equipment & Services industry and the overall market, SYNTHESIS ENERGY SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$5.48 million or 251.18% 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 share price of SYNTHESIS ENERGY SYSTEMS INC has not done very well: it is down 13.88% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • SYNTHESIS ENERGY SYSTEMS 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. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, SYNTHESIS ENERGY SYSTEMS INC continued to lose money by earning -$0.21 versus -$0.34 in the prior year.

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