ArcelorMittal (MT) Flagged As Strong 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 ArcelorMittal ( MT) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified ArcelorMittal as such a stock due to the following factors:

  • MT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $61.0 million.
  • MT has traded 1.6 million shares today.
  • MT is trading at 2.84 times the normal volume for the stock at this time of day.
  • MT is trading at a new high 3.04% 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 MT:

ArcelorMittal, together with its subsidiaries, operates as an integrated steel and mining company worldwide. The company operates through five segments: NAFTA; Europe; Brazil and Neighboring Countries (Brazil); Africa & Commonwealth of Independent States (ACIS); and Mining. The stock currently has a dividend yield of 1.6%. Currently there are 4 analysts that rate ArcelorMittal a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for ArcelorMittal has been 7.0 million shares per day over the past 30 days. ArcelorMittal has a market cap of $17.6 billion and is part of the basic materials sector and metals & mining industry. Shares are up 1.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates ArcelorMittal as a hold. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. At the same time, however, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • ARCELORMITTAL SA 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 reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ARCELORMITTAL SA continued to lose money by earning -$0.61 versus -$1.46 in the prior year. This year, the market expects an improvement in earnings (-$0.11 versus -$0.61).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 17.4%. Since the same quarter one year prior, revenues fell by 13.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, ARCELORMITTAL SA underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for ARCELORMITTAL SA is currently extremely low, coming in at 8.05%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.25% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$915.00 million or 94.26% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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