Silver Wheaton (SLW) Strong On High Relative 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.

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

  • SLW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $76.2 million.
  • SLW has traded 612,414 shares today.
  • SLW is trading at 2.19 times the normal volume for the stock at this time of day.
  • SLW is trading at a new high 3.03% 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 SLW:

Silver Wheaton Corp. operates as a precious metals streaming company worldwide. The company has 18 long-term purchase agreements and 1 early deposit long-term purchase agreement associated with silver and gold relating to 27 various mining assets. The stock currently has a dividend yield of 1%. SLW has a PE ratio of 36. Currently there are 12 analysts that rate Silver Wheaton a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Silver Wheaton has been 4.3 million shares per day over the past 30 days. Silver Wheaton has a market cap of $8.1 billion and is part of the basic materials sector and metals & mining industry. Shares are down 1.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Silver Wheaton 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, premium valuation and weak operating cash flow.

Highlights from the ratings report include:
  • SLW's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 19.31, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for SILVER WHEATON CORP is currently very high, coming in at 72.55%. Regardless of SLW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SLW's net profit margin of 37.06% significantly outperformed against the industry.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 18.2%. Since the same quarter one year prior, revenues fell by 16.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The share price of SILVER WHEATON CORP has not done very well: it is down 8.32% 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. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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