Today's Weak On High Volume Stock: SunEdison Semiconductor (SEMI)

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 SunEdison Semiconductor ( SEMI) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified SunEdison Semiconductor as such a stock due to the following factors:

  • SEMI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.6 million
  • SEMI has traded 200,041 shares today
  • SEMI is trading at 2.39 times the normal volume for the stock at this time of day
  • SEMI is trading at a new low 3.035326263442100103162601953954435884952545166015625 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 SEMI:

SunEdison Semiconductor Limited develops, manufactures, and sells silicon wafers for the semiconductor industry in the United States and internationally. Currently there are two analysts that rate SunEdison Semiconductor a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for SunEdison Semiconductor has been 118,300 shares per day over the past 30 days. SunEdison Semiconductor has a market cap of $798.8 million and is part of the technology sector and electronics industry. Shares are down 2.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates SunEdison Semiconductor as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • Net operating cash flow has decreased to $34.60 million or 21.89% 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 gross profit margin for SUNEDISON SEMICONDUCTOR LTD is rather low; currently it is at 23.52%. Regardless of SEMI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SEMI's net profit margin of -4.66% significantly underperformed when compared to the industry average.
  • SEMI, with its decline in revenue, slightly underperformed the industry average of 0.7%. Since the same quarter one year prior, revenues slightly dropped by 3.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.93 is somewhat weak and could be cause for future problems.
  • Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, SUNEDISON SEMICONDUCTOR LTD's return on equity significantly trails that of both the industry average and the S&P 500.

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