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

  • MEOH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $40.0 million.
  • MEOH has traded 99,394 shares today.
  • MEOH is trading at 2.45 times the normal volume for the stock at this time of day.
  • MEOH is trading at a new low 3.06% 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 MEOH:

Methanex Corporation produces and supplies methanol in the Asia Pacific, North America, Europe, and South America. It also purchases methanol produced by others under methanol offtake contracts and on the spot market. The company was founded in 1968 and is headquartered in Vancouver, Canada. The stock currently has a dividend yield of 4.4%. MEOH has a PE ratio of 8. Currently there are 4 analysts that rate Methanex a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Methanex has been 1.1 million shares per day over the past 30 days. Methanex has a market cap of $2.3 billion and is part of the basic materials sector and chemicals industry. Shares are down 23.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Methanex as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and disappointing return on equity.

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 Chemicals industry. The net income increased by 51.4% when compared to the same quarter one year prior, rising from $51.58 million to $78.07 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.87, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.45, which illustrates the ability to avoid short-term cash problems.
  • MEOH, with its decline in revenue, slightly underperformed the industry average of 18.2%. Since the same quarter one year prior, revenues fell by 27.8%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • MEOH's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 43.82%, which is also worse than the performance of the S&P 500 Index. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • Net operating cash flow has decreased to $133.78 million or 21.71% 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.

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