SunCoke Energy (SXC) Is Weak On High 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 SunCoke Energy ( SXC) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified SunCoke Energy as such a stock due to the following factors:

  • SXC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.8 million.
  • SXC has traded 471,813 shares today.
  • SXC is trading at 29.49 times the normal volume for the stock at this time of day.
  • SXC is trading at a new low 7.00% 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 SXC:

SunCoke Energy, Inc. operates as an independent producer of coke in the Americas. The company offers metallurgical and thermal coal for use as a raw material in the blast furnace steelmaking process. It also provides coal handling and blending services. The stock currently has a dividend yield of 2%. Currently there are 3 analysts that rate SunCoke Energy a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for SunCoke Energy has been 609,300 shares per day over the past 30 days. SunCoke Energy has a market cap of $966.1 million and is part of the basic materials sector and metals & mining industry. The stock has a beta of 2.24 and a short float of 2.3% with 1.99 days to cover. Shares are down 27.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates SunCoke Energy as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 48.7% when compared to the same quarter one year prior, rising from -$7.80 million to -$4.00 million.
  • Net operating cash flow has significantly increased by 198.23% to $11.10 million when compared to the same quarter last year. In addition, SUNCOKE ENERGY INC has also vastly surpassed the industry average cash flow growth rate of 13.64%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 17.3%. Since the same quarter one year prior, revenues slightly dropped by 9.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The gross profit margin for SUNCOKE ENERGY INC is rather low; currently it is at 20.57%. Regardless of SXC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SXC's net profit margin of -1.24% significantly underperformed when compared to the industry average.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, SUNCOKE ENERGY INC underperformed against that of the industry average and is significantly less than that of the S&P 500.

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