Carpenter Technology (CRS) Weak On High Volume

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

  • CRS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.6 million.
  • CRS has traded 60,597 shares today.
  • CRS is trading at 4.41 times the normal volume for the stock at this time of day.
  • CRS is trading at a new low 10.02% 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 CRS:

Carpenter Technology Corporation manufactures, fabricates, and distributes specialty metals worldwide. It operates through two segments: Specialty Alloys Operations and Performance Engineered Products. The stock currently has a dividend yield of 2.2%. CRS has a PE ratio of 94. Currently there is 1 analyst that rates Carpenter Technology a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Carpenter Technology has been 593,700 shares per day over the past 30 days. Carpenter Technology has a market cap of $1.5 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.97 and a short float of 9.9% with 8.72 days to cover. Shares are up 10.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

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

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.54, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.93 is somewhat weak and could be cause for future problems.
  • Despite the weak revenue results, CRS has outperformed against the industry average of 42.0%. Since the same quarter one year prior, revenues fell by 20.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has decreased to $65.60 million or 45.74% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, CARPENTER TECHNOLOGY CORP has marginally lower results.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 1614.3% when compared to the same quarter one year ago, falling from -$1.40 million to -$24.00 million.

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