Quanex Building Products (NX) 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 Quanex Building Products ( NX) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Quanex Building Products as such a stock due to the following factors:

  • NX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.2 million.
  • NX has traded 104,752 shares today.
  • NX is trading at 26.93 times the normal volume for the stock at this time of day.
  • NX is trading at a new high 11.05% 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 NX:

Quanex Building Products Corporation, together with its subsidiaries, provides engineered products in worldwide. The stock currently has a dividend yield of 0.9%. NX has a PE ratio of 111. Currently there are no analysts that rate Quanex Building Products a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Quanex Building Products has been 149,100 shares per day over the past 30 days. Quanex Building has a market cap of $603.2 million and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.63 and a short float of 3.9% with 5.73 days to cover. Shares are down 7.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Quanex Building Products as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:
  • NX's revenue growth has slightly outpaced the industry average of 0.0%. Since the same quarter one year prior, revenues slightly increased by 1.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • NX's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, NX has a quick ratio of 1.91, which demonstrates the ability of the company to cover short-term liquidity needs.
  • QUANEX BUILDING PRODUCTS 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, QUANEX BUILDING PRODUCTS turned its bottom line around by earning $0.23 versus -$0.34 in the prior year. This year, the market expects an improvement in earnings ($0.46 versus $0.23).
  • The gross profit margin for QUANEX BUILDING PRODUCTS is rather low; currently it is at 18.21%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.40% trails that of the industry average.
  • In its most recent trading session, NX has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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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