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

  • CNHI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.0 million.
  • CNHI has traded 402,242 shares today.
  • CNHI is trading at 2.73 times the normal volume for the stock at this time of day.
  • CNHI is trading at a new low 3.00% 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 CNHI:

CNH Industrial N.V. designs, produces, markets, sells, and finances agricultural and construction equipment, trucks, commercial vehicles, buses, and specialty vehicles, engines, transmissions, and axles worldwide. The stock currently has a dividend yield of 3.4%. CNHI has a PE ratio of 34. Currently there are no analysts that rate CNH Industrial a buy, 2 analysts rate it a sell, and 4 rate it a hold.

The average volume for CNH Industrial has been 1.6 million shares per day over the past 30 days. CNH Industrial has a market cap of $8.8 billion and is part of the industrial goods sector and industrial industry. Shares are down 7.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates CNH Industrial as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, generally high debt management risk, disappointing return on equity, weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • CNHI has underperformed the S&P 500 Index, declining 17.16% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • The debt-to-equity ratio is very high at 5.50 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Machinery industry and the overall market, CNH INDUSTRIAL NV's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has decreased to $1,751.00 million or 18.52% 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 CNH INDUSTRIAL NV is rather low; currently it is at 23.12%. Regardless of CNHI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.36% trails the industry average.

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