Today's Dead Cat Bounce Stock Is Companhia Siderurgica Nacional (SID)

Trade-Ideas LLC identified Companhia Siderurgica Nacional ( SID) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Companhia Siderurgica Nacional as such a stock due to the following factors:

  • SID has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.6 million.
  • SID has traded 768,494 shares today.
  • SID is up 3.2% today.
  • SID was down 8.4% yesterday.

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More details on SID:

Companhia Siderurgica Nacional produces steel. The company operates through five segments including steel, mining, cement, logistics, and energy. SID has a PE ratio of 25. Currently there are no analysts that rate Companhia Siderurgica Nacional a buy, 3 analysts rate it a sell, and none rate it a hold.

The average volume for Companhia Siderurgica Nacional has been 2.5 million shares per day over the past 30 days. Companhia Siderurgica Nacional has a market cap of $5.1 billion and is part of the basic materials sector and metals & mining industry. Shares are up 247.4% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Companhia Siderurgica Nacional as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins, weak operating cash flow, generally high debt management risk and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The gross profit margin for COMPANHIA SIDERURGICA NACION is currently lower than what is desirable, coming in at 31.06%. It has decreased from the same quarter the previous year.
  • Net operating cash flow has significantly decreased to -$23.32 million or 141.53% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The debt-to-equity ratio is very high at 9.49 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 2.61, which shows the ability to cover short-term cash needs.
  • COMPANHIA SIDERURGICA NACION reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, COMPANHIA SIDERURGICA NACION swung to a loss, reporting -$0.16 versus $0.15 in the prior year. For the next year, the market is expecting a contraction of 539.4% in earnings (-$1.02 versus -$0.16).
  • 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, COMPANHIA SIDERURGICA NACION's return on equity significantly trails that of both the industry average and the S&P 500.

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