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

  • WOR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.9 million.
  • WOR has traded 92,504 shares today.
  • WOR is trading at 6.23 times the normal volume for the stock at this time of day.
  • WOR is trading at a new high 7.02% 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 WOR:

Worthington Industries, Inc., a metals manufacturing company, focuses on value-added steel processing and manufactured metal products in the United States, Europe, Mexico, Canada, and internationally. It operates through three segments: Steel Processing, Pressure Cylinders, and Engineered Cabs. The stock currently has a dividend yield of 2.5%. WOR has a PE ratio of 25. Currently there are no analysts that rate Worthington Industries a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Worthington Industries has been 291,800 shares per day over the past 30 days. Worthington has a market cap of $1.9 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.76 and a short float of 3% with 4.23 days to cover. Shares are down 5.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Worthington Industries as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 17.3%. Since the same quarter one year prior, revenues slightly increased by 4.1%. 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.
  • WOR's debt-to-equity ratio of 0.92 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.84 is weak.
  • WORTHINGTON INDUSTRIES 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, WORTHINGTON INDUSTRIES increased its bottom line by earning $2.12 versus $1.92 in the prior year. For the next year, the market is expecting a contraction of 4.0% in earnings ($2.04 versus $2.12).
  • Net operating cash flow has decreased to $83.77 million or 13.48% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • 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 Metals & Mining industry. The net income has significantly decreased by 163.3% when compared to the same quarter one year ago, falling from $40.60 million to -$25.71 million.

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