Trade-Ideas LLC identified Companhia Siderurgica Nacional ( SID) as a weak on high relative volume 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 $6.4 million.
  • SID has traded 641,626 shares today.
  • SID is trading at 3.78 times the normal volume for the stock at this time of day.
  • SID is trading at a new low 6.20% 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 SID:

Companhia Siderurgica Nacional operates as an integrated steel producer in Brazil. It operates through five segments: Steel, Mining, Logistics, Cement, and Energy. SID has a PE ratio of 9. 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 2.7 million shares per day over the past 30 days. Companhia Siderurgica Nacional has a market cap of $2.7 billion and is part of the basic materials sector and metals & mining industry. Shares are up 148% year-to-date as of the close of trading on Wednesday.

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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 unimpressive growth in net income, weak operating cash flow, generally high debt management risk, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • 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 291.4% when compared to the same quarter one year ago, falling from $123.12 million to -$235.69 million.
  • Net operating cash flow has significantly decreased to -$264.63 million or 151.31% 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 gross profit margin for COMPANHIA SIDERURGICA NACION is currently lower than what is desirable, coming in at 32.00%. Regardless of SID's low profit margin, it has managed to increase from the same period last year.
  • The debt-to-equity ratio is very high at 4.42 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, SID has managed to keep a strong quick ratio of 1.88, which demonstrates the ability to cover short-term cash needs.
  • The share price of COMPANHIA SIDERURGICA NACION has not done very well: it is down 8.58% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

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