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

  • TKR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $39.7 million.
  • TKR has traded 131,316 shares today.
  • TKR is trading at 4.84 times the normal volume for the stock at this time of day.
  • TKR is trading at a new low 4.01% 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 TKR:

The Timken Company engineers, manufactures, and markets bearings, transmissions, gearboxes, and chain and related products worldwide. It operates in two segments: Mobile Industries and Process Industries. The stock currently has a dividend yield of 3.4%. TKR has a PE ratio of 607. Currently there are 3 analysts that rate Timken a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Timken has been 881,800 shares per day over the past 30 days. Timken has a market cap of $2.5 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.34 and a short float of 6% with 3.47 days to cover. Shares are up 7.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Timken 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 and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.49, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.16, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $128.50 million or 15.14% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 0.08%.
  • Despite the weak revenue results, TKR has outperformed against the industry average of 21.4%. Since the same quarter one year prior, revenues slightly dropped by 6.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Machinery industry and the overall market, TIMKEN CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for TIMKEN CO is currently lower than what is desirable, coming in at 31.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.99% is significantly below that of the industry average.

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