Globe Specialty Metals (GSM) Weak On High Volume

Trade-Ideas LLC identified Globe Specialty Metals ( GSM) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Globe Specialty Metals as such a stock due to the following factors:

  • GSM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.3 million.
  • GSM has traded 53,555 shares today.
  • GSM is trading at 5.18 times the normal volume for the stock at this time of day.
  • GSM is trading at a new low 3.01% 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 GSM:

Globe Specialty Metals, Inc. produces and sells silicon metal and silicon-based alloys in the United States, Argentina, Canada, China, Poland, and South Africa. The company operates through five segments: GMI, Globe Metales, Solsil, Corporate, and Other segments. The stock currently has a dividend yield of 2.2%. GSM has a PE ratio of 19. Currently there are 5 analysts that rate Globe Specialty Metals a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Globe Specialty Metals has been 421,800 shares per day over the past 30 days. Globe Specialty has a market cap of $1.1 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.64 and a short float of 2.6% with 4.52 days to cover. Shares are down 13.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Globe Specialty Metals as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and notable return on equity. 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:
  • GSM's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GSM has a quick ratio of 1.63, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly increased by 176.31% to $58.97 million when compared to the same quarter last year. In addition, GLOBE SPECIALTY METALS INC has also vastly surpassed the industry average cash flow growth rate of 7.17%.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, GLOBE SPECIALTY METALS INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The share price of GLOBE SPECIALTY METALS INC has not done very well: it is down 23.22% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • The gross profit margin for GLOBE SPECIALTY METALS INC is rather low; currently it is at 22.37%. It has decreased from the same quarter the previous year.

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