Trade-Ideas: Quanex Building Products (NX) Is Today's Strong 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 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 $7.4 million.
  • NX has traded 51,402 shares today.
  • NX is trading at 6.58 times the normal volume for the stock at this time of day.
  • NX is trading at a new high 5.05% 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 0.8%. NX has a PE ratio of 65. 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 181,800 shares per day over the past 30 days. Quanex Building has a market cap of $638.8 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 3.2% with 2.22 days to cover. Shares are up 0.1% year-to-date as of the close of trading on Monday.

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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 impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and poor profit margins.

Highlights from the ratings report include:
  • NX's revenue growth has slightly outpaced the industry average of 0.3%. Since the same quarter one year prior, revenues slightly increased by 5.0%. Growth in the company's revenue appears to have helped boost the 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 1.76, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for QUANEX BUILDING PRODUCTS is rather low; currently it is at 21.95%. Regardless of NX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.61% trails the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Building Products industry. The net income has significantly decreased by 88.6% when compared to the same quarter one year ago, falling from $20.13 million to $2.29 million.

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