REX American Resources (REX) Highlighted As Weak On High Volume

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 REX American Resources ( REX) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified REX American Resources as such a stock due to the following factors:

  • REX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.5 million.
  • REX has traded 64,561 shares today.
  • REX is trading at 2.41 times the normal volume for the stock at this time of day.
  • REX is trading at a new low 4.01% 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.

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More details on REX:

REX American Resources Corporation, through its subsidiaries, produces and sells ethanol. The company's products include ethanol, dried distillers grains, modified distillers grains, and non-food grade corn oil. REX has a PE ratio of 6. Currently there is 1 analyst that rates REX American Resources a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for REX American Resources has been 164,900 shares per day over the past 30 days. REX American has a market cap of $517.3 million and is part of the conglomerates sector and conglomerates industry. The stock has a beta of 2.88 and a short float of 23.8% with 8.42 days to cover. Shares are up 5.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates REX American Resources as a buy. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 28.2% when compared to the same quarter one year prior, rising from $15.87 million to $20.35 million.
  • REX has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 7.64, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has slightly increased to $22.16 million or 5.46% when compared to the same quarter last year. In addition, REX AMERICAN RESOURCES CORP has also vastly surpassed the industry average cash flow growth rate of -53.10%.

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