Trade-Ideas: Star Bulk Carriers (SBLK) Is Today's Weak On High Relative 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.

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

  • SBLK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.7 million.
  • SBLK has traded 148,529 shares today.
  • SBLK is trading at 2.69 times the normal volume for the stock at this time of day.
  • SBLK is trading at a new low 3.46% 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in SBLK with the Ticky from Trade-Ideas. See the FREE profile for SBLK NOW at Trade-Ideas

More details on SBLK:

Star Bulk Carriers Corp., a shipping company, provides seaborne transportation solutions in the dry bulk sector worldwide. Its vessels transport various bulks, which include iron ore, coal, and grain, as well as bauxite, fertilizers, and steel products. Currently there are 3 analysts that rate Star Bulk Carriers a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Star Bulk Carriers has been 469,800 shares per day over the past 30 days. Star Bulk Carriers has a market cap of $514.2 million and is part of the services sector and transportation industry. The stock has a beta of 3.27 and a short float of 8.4% with 6.42 days to cover. Shares are down 51.5% year-to-date as of the close of trading on Wednesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Star Bulk Carriers as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Marine industry and the overall market, STAR BULK CARRIERS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for STAR BULK CARRIERS CORP is currently extremely low, coming in at 14.07%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 0.60% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$2.82 million or 137.70% 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.
  • SBLK's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 70.54%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • STAR BULK CARRIERS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, STAR BULK CARRIERS CORP turned its bottom line around by earning $0.35 versus -$58.31 in the prior year. For the next year, the market is expecting a contraction of 192.8% in earnings (-$0.33 versus $0.35).

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

If you liked this article you might like

Rev's Forum: Keep Your Motor Idling, but Wait to Gun That Engine

Rev's Forum: Keep Your Motor Idling, but Wait to Gun That Engine

Traders Are Focused on the Big-Caps

Traders Are Focused on the Big-Caps

Dry Bulk Shippers Upgraded at Morgan Stanley, Stocks Surge

Dry Bulk Shippers Upgraded at Morgan Stanley, Stocks Surge

It's Called a Watch List for a Reason

It's Called a Watch List for a Reason

Market Taking a Break, but Probably Not for Long

Market Taking a Break, but Probably Not for Long